Lloyds Banking Group has completed the UK’s first purchase of government bonds using tokenized deposits, marking a significant step in the integration of blockchain technology into sovereign debt markets.
Lloyds Bank Executes First Gilt Trade on Blockchain as Moody’s Sees $9tn Stablecoin Boom
7 January 2026 - 15:55 CET
By Stu Clelland
The transaction saw the British lender use the Canton Network, a privacy-enabled blockchain designed for institutional finance, to buy UK Gilts. Lloyds used tokenised deposits to settle the trade, bypassing traditional payment rails that often slow down securities settlement.
The move by the UK's third-largest bank validates a growing trend among global financial institutions to use "digital cash" for backend plumbing rather than speculative trading.
The $9tn forecastThe Lloyds deal coincides with a bullish outlook on settlement infrastructure from Moody’s.
In a report released this week, the ratings agency projected that stablecoin settlement volume will grow by approximately 87% in 2026, reaching a scale of $9tn. Moody’s noted that fiat-backed stablecoins and tokenised deposits are transitioning from crypto-native trading tools to core components of institutional market infrastructure.
"Stablecoins are becoming the digital cash for liquidity management and collateral transfer," the report stated, highlighting that the convergence of traditional and digital finance is now being driven by utility, not just asset price appreciation
The canton connectionLloyds’ choice of the Canton Network is notable. Unlike public blockchains such as Ethereum or Solana, Canton is a "network of networks" built by Digital Asset, allowing differing financial systems to interoperate while maintaining strict data privacy, a non-negotiable requirement for regulated banks trading sovereign debt.
Lloyds said the transaction is part of a broader pilot to explore how programmable money can streamline post-trade processes and reduce intraday liquidity risks.
