- Nearly 75% of major UK financial institutions expect tokenization to reshape financial services, according to a new survey by Lloyds Banking Group.
- Faster payments and settlement was cited as the biggest potential benefit by 60% of respondents, while 41% highlighted improved collateral and liquidity management.
- UK policymakers are pushing to scale tokenization, with an industry task force estimating it could add up to $44 billion to the UK’s annual economic output by 2035.
Lloyds Banking Group revealed on Thursday that nearly three-quarters of major UK financial institutions expect tokenization to reshape financial services. The finding comes from an annual survey polling 100 senior decision-makers across major UK banks, insurers, asset managers and financial sponsors.
Faster payments and settlement emerged as the biggest potential benefit, cited by 60% of respondents, while 41% pointed to improved collateral and liquidity management. Lloyds said moving assets and payments onto digital infrastructure could free up capital tied up in financial transactions. “The next phase is about turning those individual use cases into infrastructure that works at scale,” said Rob Hale, co-head of global markets at Lloyds.
Lloyds has already tested the technology directly, working with Archax and Canton Network on what it described as the UK’s first public blockchain transaction using tokenized deposits to purchase a tokenized UK government bond. Meanwhile, UK policymakers are pushing tokenization beyond pilot projects and into the country’s financial infrastructure. The Bank of England proposed extending its core settlement infrastructure toward near-24/7 availability in May.
Consequently, a government-backed industry task force estimated that leadership in tokenized finance could add as much as 33 billion British pounds ($44 billion) to the UK’s annual economic output by 2035. The task force also called for the country’s first tokenized government bond by early 2027. The UK has also sought greater coordination with the US on tokenized finance, with both treasuries recommending a private-sector group to test cross-border uses of tokenized assets.
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