Lloyds Banking Group has published its annual Institutions Sentiment Survey, finding that 71% of senior decision-makers at the UK's largest financial institutions expect tokenisation to reshape the future of financial services. The results come as institutions increase investment in on-chain infrastructure and digital assets.

The survey covered 100 senior executives across banks, insurers, financial sponsors, and asset and wealth managers.

Tokenisation allows assets such as cash, bonds, and funds to be represented digitally on-chain, potentially enabling faster settlement, automated transactions, and more efficient management of collateral and liquidity.

Settlement Speed Seen as Top Benefit

Faster payments and settlement were identified as the biggest potential benefit, cited by 60% of respondents, followed by collateral and liquidity management at 41%. Lloyds said these efficiencies could release capital and liquidity currently tied up in financial transactions for other uses. The emphasis on settlement reflects a basic balance-sheet mechanic: capital and collateral committed to trades that have not yet settled are effectively locked in place, so compressing that window is where respondents see the greatest potential gain.

Investment in emerging technology is also accelerating. Of the institutions surveyed, 77% said such investment is now a growth priority, up from 41% in 2025 — a near-doubling in a single year — while 64% expect to increase capital expenditure over the next 12 months. Respondents also viewed the modernisation of financial and market infrastructure as one of the UK's biggest economic opportunities over the coming year.

"Financial institutions have spent years modernising how customers interact with financial services. Increasingly, attention is turning to the infrastructure behind those experiences. Tokenisation is a key part of that shift, with organisations exploring how it can help them transact in a safe, trusted environment, improve efficiency, make better use of capital and enable new products and services. Those that can turn that potential into real-world solutions stand to gain the greatest advantage," said Lisa Francis, Global Head of CIB Coverage at Lloyds.

Live Market Pilots

The findings build on Lloyds' own testing of tokenisation in live financial markets. In early 2026, the bank completed the UK's first public-blockchain transaction using tokenised deposits to purchase a tokenised gilt — a UK government bond — working with Archax, a UK-regulated digital securities platform, and the Canton Network, a public blockchain built for financial applications. Public blockchains are open networks that anyone can access and verify, in contrast to permissioned systems that admit only approved participants — a distinction central to the transaction's UK-first status.

Tokenised deposits are blockchain-based representations of commercial bank money that can be transferred and settled on-chain while remaining fully backed by deposits held at the issuing bank.

Lloyds is also expanding its work on tokenised deposits and digital securities. The bank has carried out three live tokenised deposit transactions under Project Agorá — a Bank for International Settlements (BIS) initiative bringing together central banks and commercial banks to explore how tokenised forms of central bank money and commercial bank deposits could interact in cross-border payments — covering sterling, euros, and Swiss francs. One of these was a cross-currency transaction linking FX conversion, payment, and settlement in a single flow.

"The real opportunity is to make financial markets work faster, more efficiently and with greater flexibility for clients. Faster settlement, more efficient use of collateral and better movement of liquidity are tangible benefits that boost balance sheets. 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.

The full survey is available in the Tokenisation Set to Transform Financial Services report (PDF).

Source: BitcoinKE