Lloyds Executes UK's First Gilt Trade Using Tokenized Deposits
Lloyds Bank has executed what it describes as the UK’s first gilt trade settled using tokenized deposits, working with digital securities firm Archax and settlement network Canton Network. The transaction, announced 7 January 2026, used tokenized bank deposits as the settlement asset rather than traditional cash movement, demonstrating a live use case for on‑ledger settlement in the sovereign debt market.
The trade is a noteworthy step for institutional adoption of tokenized infrastructure: it could reduce frictions in post‑trade processing and open new rails for market participants if scaled. Market observers will watch for additional pilots and how regulators and custodians adapt operational and risk frameworks, but the collaboration signals growing interest from incumbent banks in integrating tokenized settlement tools into mainstream capital markets workflows.