Majority of UK Financial Instutions Expect Tokenization to Reshape Markets
BITmarkets Team
Oct 02, 2026
The findings come from an annual survey conducted by Lloyds Banking Group, the UK’s largest financial services provider. The study surveyed 100 senior decision-makers from leading UK banks, insurers, asset managers and financial sponsors. Faster payments and settlement were identified as the leading potential advantage of tokenization, cited by 60% of respondents. Another 41% highlighted improvements to collateral and liquidity management.
Lloyds said moving assets and payments onto digital infrastructure could also release capital and liquidity currently tied up in financial transactions, enabling institutions to put those resources to use elsewhere.
UK financial institutions see potential in tokenization
“The next phase is about turning those individual use cases into infrastructure that works at scale, with the interoperability and common standards needed to connect digital and traditional markets,” said Rob Hale, co-head of global markets at Lloyds. Lloyds has already tested tokenization in practice. Earlier this year, the bank worked with Archax and Canton Network on what it described as the UK’s first public blockchain transaction involving tokenized deposits to purchase a tokenized UK government bond.
The experiment reflects a broader shift among financial institutions from exploring isolated blockchain applications toward integrating tokenization into established financial infrastructure.
UK pushes tokenization beyond pilot projects
The survey comes as UK policymakers work to move tokenized finance beyond experimental projects and toward broader adoption across the country’s financial system. In May, the Bank of England proposed extending the availability of its core settlement infrastructure toward near-24/7 operation. A subsequent government payments blueprint also called for traditional and tokenized forms of money to function within an interoperable payments system.
In July, a government-backed industry task force estimated that becoming a leader in tokenized finance could contribute as much as 33 billion British pounds ($44 billion) to the UK’s annual economic output by 2035. The group also called for the country’s first tokenized government bond to be issued by early 2027.
UK and US seek greater coordination
The UK has also been pursuing closer cooperation with the United States on tokenized finance. In July, the US and UK treasuries recommended establishing a private-sector group to test cross-border applications of tokenized assets. They also encouraged US financial regulators and the Bank of England to identify common approaches to regulating the emerging sector.
Together, these initiatives indicate a growing effort to develop the standards, interoperability and regulatory foundations needed for tokenized assets to operate alongside traditional financial markets.
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