Tokenization is becoming a priority for the U.K. financial sector. Banks and other market participants expect the technology to accelerate settlement and improve the efficiency of capital and liquidity management.
Nearly three quarters of the U.K.’s largest financial institutions believe tokenization will change financial services and how money and assets move. According to a Lloyds study, 71% of executives surveyed expect the technology to have a significant impact on the industry, while 77% of firms already consider investment in new technologies a priority for growth.
Lloyds conducted the study from April 13 to May 19, 2026. It surveyed 100 executives and other senior decision-makers at the U.K.’s largest banks, insurers, investment firms, asset managers, and private capital firms.
Respondents identified the main benefits of tokenization as:
- faster payments and settlement, cited by 60%;
- more efficient collateral and liquidity management, cited by 41%.
Lloyds also noted that tokenization could automate transactions when predefined conditions are met and free up capital and liquidity that are currently tied up during settlement.
Experts estimate that tokenization of the U.K. financial market could generate £33 billion in annual economic benefits by 2035.
Interest in tokenization is growing as the financial sector increases investment in digital infrastructure. Investment in new and emerging technologies is now a growth priority for 77% of organizations, nearly double the 41% recorded in 2025. In addition, 64% of financial firms plan to increase capital spending over the next 12 months.
Lloyds expects the technology’s next stage of development to involve a shift from individual use cases to infrastructure at scale. This will require interoperability between different systems and common standards that can connect digital assets with traditional financial markets. The bank cited faster settlement, more efficient use of collateral, and easier movement of liquidity among the practical benefits.
Lloyds is already testing related solutions with other market participants. In 2026, the bank worked with Archax and Canton Network to conduct the U.K.’s first public blockchain transaction in which tokenized bank deposits were used to purchase tokenized U.K. government bonds. The project demonstrated how tokenization can simplify and accelerate settlement between financial market participants.
Lloyds Banking Group is the U.K.’s largest retail financial services group, serving 28 million customers and around 1 million businesses in the country. According to the press release, the bank has invested more than £4 billion in modernizing its technology infrastructure. Lloyds is also participating in an international consortium formed to issue stablecoins and tested cross-border settlement using USDC in partnership with Visa.
