Lloyds has completed the first UK transaction using Tokenised Deposits, marking a global debut for sterling deposits on a public blockchain.
Lloyds Bank Corporate Markets issued the deposits on the Canton Network, a blockchain for regulated financial markets, and used them to purchase a Tokenised Gilt from Archax.
Archax then transferred the underlying funds back into its Lloyds account, demonstrating how transactions can move between blockchain and traditional banking systems.
The transaction highlights how tokenisation can digitise traditional banking assets, allowing them to be traded or transferred instantly.
Unlike private ledgers, the Canton Network offers broader accessibility while maintaining confidentiality.
Lloyds also ran its own validator node to verify and secure transactions, ensuring the same standards applied as for cash deposits.
Surath Sengupta, Head of Transaction Banking Products at Lloyds, said:
“This pilot is a critical step towards building the financial ecosystem of the future. Tokenisation allows us to bring real-world assets onto blockchain infrastructure, creating opportunities for businesses to transact with greater speed, transparency, and flexibility.”
Tokenised Deposits retain the benefits of conventional deposits, such as earning interest and remaining protected under the Financial Services Compensation Scheme, while offering additional advantages for businesses.
These include instant settlement, the use of smart contracts to automate transactions, and enhanced transparency and security through distributed ledger technology.
Graham Rodford, CEO and Co-founder at Archax, added:
“This transaction shows how tokenised real-world assets can deliver real-world benefits for institutions. Instant settlement and enhanced transparency are game-changers, and we’re proud to work with Lloyds and Canton to lead the way in shaping the next generation of financial markets.”
The initiative builds on Lloyds’ earlier work with Archax, using Tokenised Money Market Fund units as collateral, and signals a move towards broader adoption of digital assets in traditional finance.
Featured image credit: Edited by Fintech News Switzerland, based on image by CgDesign4U via Freepik
