UK Financial Leaders Bet Big on Tokenization

Nearly three-quarters of major UK financial institutions expect tokenization to transform core areas of financial services, according to a new survey from Lloyds Banking Group.

The research polled 100 senior decision-makers across banks, insurers, asset managers, and financial sponsors and found that faster payments and settlement are the most anticipated benefits, cited by 60% of respondents.

Lloyds links tokenization to capital efficiency, arguing it could reduce liquidity trapped in transaction processes and free up resources for institutions to deploy elsewhere.

The bank's survey comes alongside direct testing of tokenized settlement, with Lloyds working on what it described as the UK's first public blockchain transaction using tokenized deposits to purchase a tokenized UK government bond.

UK policymakers are also pushing for wider adoption of tokenization, aiming to move near-24/7 availability and interoperable money.