71% of UK finance leaders expect tokenization to reshape financial services: Lloyds

A Lloyds Banking Group annual survey found that 71% of senior decision-makers at major UK financial institutions expect tokenization to fundamentally change financial services. The poll covered 100 executives from banks, insurers, asset managers and financial sponsors and identified faster payments and settlement as the most widely cited potential advantage, with 60% of respondents flagging it. Improved collateral and liquidity management was noted by 41%.

Lloyds said that shifting assets and payment flows onto digital infrastructure could release capital and liquidity currently locked within traditional transaction processes, enabling firms to redeploy those resources. Rob Hale, co-head of global markets at Lloyds, framed the next stage as a move from discrete use cases to interoperable, standards-based infrastructure connecting digital and legacy markets.

The survey follows practical tests by Lloyds: earlier in the year the bank participated with Archax and the Canton Network in what it described as the UK’s first public blockchain transaction that used tokenized deposits to purchase a tokenized UK government bond. Such pilots come alongside a wider policy push. In May the Bank of England proposed extending its settlement system toward near-24/7 availability, and a government payments blueprint recommended interoperability between tokenized and traditional money systems.

Policy work has also considered economic potential and cross-border coordination. A government-backed industry task force in July estimated that leadership in tokenized finance could contribute up to 33 billion pounds to UK annual economic output by 2035 and recommended issuing a tokenized government bond by early 2027. The UK and US treasuries have suggested creating a private-sector forum to test cross-border tokenized asset use and urged regulators to seek shared approaches to oversight.