Lloyds Banking Group, digital exchange Archax, and blockchain Canton Network have partnered to complete a public blockchain transaction using tokenised deposits, marking a first for the UK and “a global debut for sterling deposits”.
The tokenised deposits were issued by Lloyds Bank on the Canton Network. Lloyds Bank Corporate Markets, a Lloyds Bank subsidiary, then used the deposits to purchase a tokenised gilt from Archax. Following the purchase, Archax moved the underlying funds back to its regular account with Lloyds, proving that transactions can flow smoothly between blockchain and traditional banking systems.
Additionally, Lloyds ran its own validator node on the Canton Network during the pilot. The node verified and secured the transaction, ensuring that customer resources were managed with the same security and standards the bank uses for cash deposits.
Archax states in a press release that the transaction “demonstrates how tokenisation can bring traditional instruments such as gilts into the digital ecosystem” and plays into the UK government’s recent interest in issuing its own digital securities.
Surath Sengupta, head of Transaction Banking Products at Lloyds says, “Tokenisation allows us to bring real-world assets onto blockchain infrastructure, creating opportunities for businesses to transact with greater speed, transparency, and flexibility. Crucially, these advantages come without losing the benefits of traditional cash, as tokenised deposits can continue to earn interest and remain protected by the Financial Services Compensation Scheme.”
