Nearly three-quarters of major UK financial institutions expect tokenization to reshape financial services as banks and asset managers increasingly explore blockchain-based infrastructure for payments, settlement, and liquidity management.
The finding is part of an annual survey conducted by Lloyds Banking Group, the UK's largest financial services provider, which polled 100 senior decision-makers across major UK banks, insurers, asset managers, and financial sponsors.
Key Benefits Identified
Faster payments and settlement emerged as the primary potential benefit, cited by 60% of respondents. Additionally, 41% pointed to improved collateral and liquidity management.
Lloyds noted that shifting assets and payments onto digital infrastructure could release capital and liquidity currently tied up in financial transactions, enabling institutions to deploy those resources elsewhere.
“The next phase is about turning those individual use cases into infrastructure that works at scale, with the interoperability and common standards needed to connect digital and traditional markets,” said Rob Hale, co-head of global markets at Lloyds.
Lloyds has also tested the technology firsthand. Earlier this year, the bank collaborated with Archax and Canton Network on what it described as the UK's first public blockchain transaction utilizing tokenized deposits to purchase a tokenized UK government bond.
Broader UK Push for Tokenized Finance
The survey coincides with efforts by UK policymakers to advance tokenization from pilot projects into the nation's core financial infrastructure.
- In May, the Bank of England proposed extending its core settlement infrastructure toward near-24/7 availability.
- A government payments blueprint subsequently called for tokenized and traditional forms of money to operate within an interoperable payments system.
- In July, a government-backed industry task force estimated that leadership in tokenized finance could add up to 33 billion British pounds ($44 billion) to the UK's annual economic output by 2035, while urging the issuance of the country's first tokenized government bond by early 2027.
Additionally, the UK has pursued closer coordination with the US regarding tokenized finance. In July, the US and UK treasuries recommended forming a private-sector group to test cross-border uses of tokenized assets, while urging US financial regulators and the Bank of England to identify shared approaches to regulation.
