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Lloyds Banking Group is signalling a major shift in the UK’s financial landscape as it explores the use of blockchain-based tokenised deposits alongside artificial intelligence. The bank believes these two technologies together could reshape how Britons buy and sell homes, cutting out inefficiencies and dramatically speeding up the mortgage process.
1. Vision for a Blockchain-Based Deposit System
Lloyds is advocating for a new model where customer deposits are recorded on the blockchain.
The goal is to redesign financial processes that currently rely on slow, paper-heavy workflows.
Key points:
- Tokenised deposits represent real customer funds but exist on a blockchain for faster, more secure movement.
- The idea is to bring the efficiency of blockchain without relying on privately issued stablecoins.
- Lloyds aims to introduce a generalised token system by 2027 after already piloting the technology at a national scale.
2. AI and Tokenisation as a Combined Force
Lloyds CEO Charlie Nunn believes that pairing tokenised deposits with AI could spark a shift as transformative as the arrival of the smartphone.
According to Nunn:
- These technologies allow large parts of financial services to be redesigned from the ground up.
- Mortgage processes could be automated through smart contracts that manage document sharing, value exchange, and payments.
- AI systems could simplify the customer experience, reducing reliance on multiple intermediaries.
The bank envisions a future where buying a home is more intuitive, faster, and less fragmented.
3. How the Technology Could Redefine Mortgages
Homebuying is one of the most complex financial journeys in the UK, involving lenders, brokers, lawyers, agents and multiple verification steps.
Blockchain and AI aim to streamline this.
Potential improvements include:
- Smart contracts automating conveyancing and payments
- Faster verification and document management
- Reduced frictions between different parties in the value chain
- A more guided customer experience, with or without a broker
Lloyds believes this could significantly cut the time required to complete a property purchase.
4. Why Tokenisation Is Favored Over Stablecoins
Nunn noted that regulatory developments abroad—such as stablecoin legislation in the US—highlight the momentum behind digital assets.
However, he emphasized that tokenised deposits offer stronger safeguards.
Key distinctions:
- Tokenised deposits carry full banking protections and are backed by actual customer funds.
- They offer instant settlement similar to stablecoins but with greater reliability.
- Lloyds sees them as a safer path forward for the UK than a privately issued sterling stablecoin.
5. Implications for the UK Economy
Beyond transforming homebuying, Lloyds sees digital finance as a potential catalyst for broader economic growth.
Nunn pointed out:
- The UK still struggles with low business confidence.
- High energy costs, regulatory pressure and labour expenses continue to constrain investment.
- Improved financial infrastructure could help encourage productivity and support long-term economic expansion.
As the UK’s largest retail bank, Lloyds’ stance reflects confidence that digital innovation can support a more dynamic economy.
Conclusion
Lloyds Bank’s push to combine AI with blockchain-based tokenised deposits marks a bold vision for the future of UK financial services. By rethinking mortgage workflows and modernizing digital infrastructure, the bank aims to simplify homebuying while strengthening the broader financial ecosystem. If fully realised, this shift could represent one of the most significant technological leaps in UK banking in decades.
This article reflects the opinions of the publisher based on available information at the time of writing. It is not intended to provide financial advice, and it does not necessarily represent the views of the news site or its affiliates. Readers are encouraged to conduct further research or consult with a financial advisor before making any investment decisions.
