Lloyds has completed the first transaction of digital assets using Tokenised Deposits – a landmark for digital finance. For the first time in the UK, Tokenised Deposits have been issued on a public blockchain. This is also a global debut for sterling deposits.
The transaction involved Lloyds Bank PLC issuing Tokenised Deposits on the Canton Network, a blockchain designed for regulated financial markets. Lloyds Bank Corporate Markets, part of Lloyds Banking Group, utilised these deposits to purchase a Tokenised Gilt from Archax.
Archax then moved the underlying funds back into its regular Lloyds account, showing how easily transactions can flow between blockchain and traditional banking systems.
With the UK government exploring the possibility of issuing its own digital securities, this transaction demonstrates how tokenisation can bring traditional instruments such as Gilts into the digital ecosystem, the banking group said.
“This transaction offers a glimpse into the future of finance; faster, smarter, and more efficient. Tokenisation allows us to bring real-world assets onto blockchain infrastructure, creating opportunities for businesses to transact with greater speed, transparency, and flexibility,” said Surath Sengupta (Head of Transaction Banking Products at Lloyds)
“Crucially, these advantages come without losing the benefits of traditional deposits, as Tokenised Deposits can continue to earn interest and remain protected by the Financial Services Compensation Scheme. This pilot is a critical step towards building the financial ecosystem of the future.”
According to Lloyds, the tokenisation of deposits will reshape how businesses manage and move money, giving them the means to complete transactions on blockchains, whilst at the same time retaining the benefits of traditional deposits – including the ability to earn interest and maintain regulatory security.
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