Lloyds Banking Group, a prominent British lender, proudly announces its achievement in executing the first U.K. gilt purchase utilizing tokenized deposits—blockchain-based representations of traditional fiat currency bank deposits.
As the nation’s third-largest bank by market capitalization, Lloyds collaborated with crypto trading platform Archax and the privacy-oriented Canton Network for this government debt acquisition. The term “gilt” alludes to the historical gold-edged certificates.
This transaction showcases the transformative potential of tokenization in traditional banking, enabling real-world assets to be converted into digital formats that can be traded, bought, or transferred instantaneously, according to Lloyds’ press release.
The operation included Lloyds Bank plc issuing tokenized deposits on the Canton Network, which were subsequently used by Lloyds Bank Corporate Markets to purchase a tokenized gilt from Archax. Ultimately, Archax returned the underlying funds to its standard Lloyds account, as noted in the release.
Surath Sengupta, head of transaction banking products at Lloyds, stated, “This transaction provides a preview of the future of finance; it will be quicker, smarter, and more efficient. Tokenisation empowers us to integrate real-world assets into blockchain infrastructure, unlocking new avenues for businesses to engage with enhanced speed, transparency, and flexibility.”
Sengupta emphasized that tokenized deposits can still accrue interest and are protected under the Financial Services Compensation Scheme, allowing these benefits—immediate settlement, automated contracts, heightened transparency, and security—without sacrificing the advantages of traditional cash.
