Visa and Lloyds Test Stablecoin Settlements in Seven-Day Pilot
Lloyds and Visa tested the use of stablecoins behind the scenes in a seven-day pilot. The banks settled payment obligations worth $750,000 using the USDC stablecoin, which is pegged to the US dollar. The funds arrived in under an hour, including over the weekend, and were transferred through Archax and the Corporate Markets branch in Jersey.
The pilot aimed to give institutions more flexibility in how and when they settle funds. Rob Cameron, Visa's UK and Ireland country manager, described the goal as giving institutions 'more choice over how and when they settle funds.' The transfer connected different blockchain environments, with Lloyds using its own node on Canton and Visa supporting settlement on a separate public blockchain.
The benefits of using stablecoins for settlement include seven-day availability and potential collateral reductions. However, the full cost of using stablecoins will determine the commercial case for institutions. The pilot did not quantify the savings in fees, reconciliation work, or advance funding, which would be necessary to determine the economic benefits of using stablecoins for settlement.