Nearly three-quarters of senior executives at major UK banks, insurers, asset managers and financial sponsors anticipate that tokenization will reshape financial services, according to an annual survey by Lloyds Banking Group. The poll of 100 decision-makers signals a shift from experimental pilots toward broader expectations for digital asset infrastructure across core market functions.

Faster payments and settlement ranked as the leading potential benefit, identified by 60% of respondents. Another 41% pointed to gains in collateral and liquidity management. Lloyds noted that transferring assets and payments onto digital systems could release capital and liquidity currently locked in transactions, enabling institutions to redeploy those resources more effectively.

Practical Testing and Industry Momentum

Lloyds has moved beyond survey findings into live testing. Earlier this year the bank collaborated with Archax and the Canton Network on a transaction it described as the UK’s first on a public blockchain. Tokenized deposits were used to purchase a tokenized UK government bond, combining issuance, custody and settlement of real financial instruments.

The survey results arrive as the sector weighs how isolated demonstrations can evolve into repeatable, scalable processes that meet regulatory and operational requirements across institutions. Interoperability and shared standards remain central challenges for linking digital rails with existing market systems.

Policy Support and Infrastructure Upgrades

UK authorities are advancing measures to incorporate tokenization into core financial infrastructure. In May the Bank of England proposed extending its settlement systems toward near-24-hour availability. A subsequent government payments blueprint called for tokenized and traditional forms of money to function within a single interoperable framework.

In July a government-backed industry task force estimated that leadership in tokenized finance could add as much as $44 billion to the UK’s annual economic output by 2035. The group also recommended that the country issue its first tokenized government bond by early 2027.

Cross-Border Coordination Efforts

The United Kingdom is pursuing alignment with the United States on tokenized assets. The US and UK treasuries recommended establishing a private-sector group to examine cross-border applications and urged US regulators together with the Bank of England to develop shared regulatory approaches. Consistent rules on reporting, custody and operational controls are viewed as essential for scalable adoption across jurisdictions.

Together the survey findings, practical trials and policy initiatives indicate that UK financial institutions and authorities are treating tokenization as a structural development rather than a peripheral experiment.