Lloyds Banking Group completed its first digital assets transaction using Tokenised Deposits, marking the UK’s first issuance on a public blockchain and the first global use of sterling deposits in this format. The deal ran on the Canton Network, with Lloyds Bank PLC issuing the Tokenised Deposits and Lloyds Bank Corporate Markets using them to purchase a Tokenised Gilt issued by Archax. Following the purchase, Archax transferred the underlying funds back into its standard account at Lloyds. The movement of funds demonstrated interoperability between blockchain networks and traditional banking infrastructure.
Graham Rodford, CEO and co-founder of Archax, said the transaction showed how tokenised real-world assets can deliver real-world benefits for institutions, highlighting instant settlement and enhanced transparency as key outcomes. According to the bank, tokenisation allows real-world assets to be represented digitally, enabling their transfer and settlement more quickly than through traditional systems. It noted that tokenised deposits can continue to earn interest and remain protected by the Financial Services Compensation Scheme, while the use of a public blockchain differs from private ledgers by enabling wider participation without compromising confidentiality for regulated activity.
The pilot builds on earlier collaboration between Lloyds and Archax, including a prior transaction that used tokenised money market fund units as collateral. The project demonstrates interoperability between blockchain networks and established banking infrastructure and underscores the potential for tokenised assets to provide transparency and instant settlement in regulated markets.
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