Lloyds Banking Group has executed the United Kingdom's first public blockchain transaction using tokenized sterling deposits. In partnership with digital asset exchange Archax and utilizing the Canton Network, the bank purchased a Tokenized Gilt, marking a global first for sterling deposits on a public ledger. The transaction involved Lloyds Bank PLC issuing Tokenized Deposits directly onto the Canton Network, a public blockchain designed for regulated markets. Lloyds Bank Corporate Markets then used these digital deposits to acquire the Tokenised Gilt from Archax, with funds seamlessly transferred back to a traditional Lloyds account.
Surath Sengupta, Head of Transaction Banking Products at Lloyds, called the transaction "a glimpse into the future of finance; faster, smarter, and more efficient." Graham Rodford, CEO of Archax, added that it shows "how tokenized real-world assets can deliver real-world benefits for institutions." The pilot builds on a previous 2025 collaboration between Lloyds and Archax and aligns with the UK government's exploration of digital securities like Gilts.
Simultaneously, BNY Mellon has launched on-chain digital representations of client deposit balances on its private, permissioned blockchain. This new capability, part of the bank's Digital Assets platform, creates digital book entries that mirror clients' existing demand deposit claims. Initially focused on collateral and margin workflows, the service involves early participants from financial institutions and digital-native firms.
Carolyn Weinberg, BNY Mellon's chief product and innovation officer, stated the move is part of helping "define how cash moves across the modern financial system" and extends "trusted bank deposits onto digital rails." The bank positions tokenized deposits as "connective tissue" for its digital asset infrastructure, aiming to reduce settlement friction, improve liquidity efficiency, and enable programmable payments.
Both developments underscore a significant industry trend toward integrating traditional banking with blockchain technology. They highlight key advantages including instant settlement, increased utility across digital and traditional markets, automated smart contracts, and enhanced transparency and security through distributed ledger technology. These initiatives position the involved banks as leaders in the tokenization of real-world assets (RWA), paving the way for broader institutional adoption and a more interconnected financial ecosystem.
