Lloyds Banking Group to Replace Trade Documents with Blockchain Technology, Plans Tokenized Deposits by 2027
Lloyds Banking Group just dropped a blockchain bomb on traditional finance—and the paper shredders are already warming up.
The 250-year-old institution announced plans to ditch physical trade documents entirely, replacing them with distributed ledger technology. No more couriers, no more filing cabinets, no more waiting weeks for paperwork to crawl across oceans. The move slashes settlement times from days to minutes and cuts operational risk by eliminating manual errors and fraud vectors.
But here's the real kicker: Lloyds confirmed it's launching tokenized deposits by 2027.
That means your savings account balance could soon exist as a digital token on a blockchain—programmable, instantly transferable, and interoperable with other financial protocols. Imagine paying an invoice by sending a token directly from your Lloyds account to a supplier's digital wallet, bypassing the entire correspondent banking spaghetti. Or earning yield through automated DeFi strategies without ever leaving the bank's ecosystem.
Traditional banks have spent years dismissing crypto as a speculative toy. Now they're racing to tokenize their own balance sheets—because nothing motivates innovation like the terrifying prospect of becoming obsolete.
The timing isn't accidental. Regulatory frameworks are crystallizing, institutional infrastructure is maturing, and client demand for digital-native assets is exploding. Lloyds isn't dipping a toe—it's building the plumbing for the next generation of financial services.
Of course, there's always a catch. The fine print will determine whether this is genuine innovation or just digital lipstick on the same old pig—banks have a knack for adopting disruptive technology while carefully preserving their profit margins.
One thing's certain: when a banking giant with £900 billion in assets starts talking tokenization, the entire sector listens. The race to digitize real-world assets just shifted into hyperdrive.
Digital documents speed up international trade
The MOVE towards digital record-keeping picked up steam in 2023 through a partnership with Enigio. The collaboration allows the bank to handle shipping papers, bills of exchange, and promissory notes through blockchain without printing or posting physical documents.
This builds on work from 2022, when Lloyds processed Britain’s first digital promissory note, with a digital bill of exchange twelve months later.
The bank broadened its digital footprint in 2024 by linking up with WaveBL, a blockchain system operating in 136 countries. Customers can now move electronic bills of lading worldwide, eliminating courier fees and the waiting times that come with paper systems.
The bank recently finished a digital Letter of Credit transaction connecting India and the United Kingdom. Where traditional paper approaches typically require several weeks, this digital method wrapped up in just four days. The faster processing supports a trade agreement between both countries targeting $120 billion in commerce by 2030.
Plans for 2027 include introducing tokenized deposits. Through “smart contracts,” the bank wants to automate legal steps like conveyancing and document handling.
This work forms part of a broader trial run by UK Finance involving other big names, including Barclays, HSBC, and Santander. The consortium is examining how tokenized money works for online purchases, remortgaging homes, and completing wholesale bond settlements. Designers believe these arrangements will reduce the risk of fraud and enable “programmable money,” where payments happen automatically when specific conditions are satisfied.
Quant Network manages the infrastructure for this framework, which should be operational by 2026. Lloyds expects this setup will eventually connect with central bank digital currencies and private assets, positioning the UK as a leader in international digital finance.
Automation has saved the bank billions since 2021
The institution is also making substantial investments in artificial intelligence. The bank now runs a cloud-based system handling 18 generative AI applications and more than 80 machine learning programs. Officials predict these AI tools will deliver £50 million in value this year, climbing to £150 million the following year.
AI is already producing financial results. Since 2021, the bank reports cutting £1.5 billion in costs through automation. The bank plans to launch a new AI financial assistant by 2026.
A recent survey revealed that 54% of UK financial companies believe AI will offer a competitive edge. Lloyds has already put over 800 AI models to work across 200 different internal operations. These initiatives helped the bank secure an “Outstanding” rating in the 2025 Euromoney Global Digital Banking report.
Currently, the bank counts 23 million customers using digital platforms, with 21 million on its mobile app.
Competing banks are also spending on technology. Barclays, for instance, has concentrated on an AI assistant for employees, and Santander is applying data to forecast when customers might have trouble with loan repayments. Meanwhile, Lloyds is pursuing comparable AI projects while simultaneously advancing blockchain into trade and deposits.
Through digitizing these operations, the bank is tackling persistent problems with high costs, sluggish processing times, and the environmental burden of paper-intensive banking. As the UK shifts its financial approach towards digital assets, Lloyds is wagering on this combination of AI and blockchain.
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