A survey published by Lloyds Banking Group on October 2, 2026 found that 71% of UK financial sector executives expect tokenization to reshape financial services. The tenth annual Financial Institutions Sentiment Survey gathered responses from 100 senior decision-makers across banks, insurers, asset managers, financial sponsors, and wealth managers. Faster payments and settlement ranked as the largest opportunity, cited by 60% of respondents, while 41% highlighted better collateral and liquidity management.
Lloyds said tokenization—representing assets such as cash, bonds, and funds digitally on blockchain infrastructure—could release capital tied up in clearing and settlement pipelines. Rob Hale, co-head of global markets at Lloyds, said institutions now need to turn separate applications into infrastructure that works at scale, supported by interoperability and common standards connecting digital and traditional markets. The survey also recorded rising technology appetite: 77% of respondents see investment in new technologies as a growth priority, up from 41% in 2025, and 64% plan to increase capital expenditure over the next 12 months.
The bank has already completed technical trials. A transaction with Archax and the Canton Network involved the purchase of tokenized UK sovereign debt settled via tokenized deposits on a public blockchain. Lloyds also settled $750,000 in live payment obligations with Visa using USDC during a seven-day pilot, with funds reaching Visa in less than an hour outside normal banking hours. Separately, UK Finance’s interbank tokenized deposit tests included remortgage transactions involving Lloyds, NatWest, and Barclays, and a simulated marketplace purchase with HSBC. Participating banks include Barclays, HSBC, Lloyds, NatWest, Nationwide, and Santander, with support from Quant, EY, and Linklaters. The group plans three digital bond issues in the first quarter of 2027 that can settle using tokenized deposits.
The UK regulatory backdrop is accelerating. The Bank of England proposed extending RTGS and CHAPS settlement hours toward near-24/7 availability in May 2026. A government-backed tokenization strategy projects that adoption could add up to £33 billion—about $44 billion—to annual economic output by 2035, with a first digital government bond targeted for early 2027 and an end-to-end tokenized repo transaction by spring 2027. US and UK officials have also recommended a private-sector group to test cross-border tokenized assets, with the SEC, CFTC, Financial Conduct Authority, and Bank of England examining common approaches to settlement finality and market infrastructure.
