Tokenization has moved from an experimental concept toward a strategic priority for major UK financial institutions, according to Lloyds Banking Group’s 10th annual Financial Institutions Sentiment Survey, released on October 2, 2026. The poll of 100 senior decision-makers across banks, insurers, asset managers, financial sponsors and wealth managers found that 71% expect blockchain-based representations of assets such as cash, bonds and funds to reshape financial services. Faster payments and settlement was the most cited benefit, selected by 60% of respondents, followed by improved collateral and liquidity management at 41%. Technology investment was a growth priority for 77% of respondents, up from 41% in 2025, while 64% planned to increase capital expenditure over the next 12 months. Lloyds has tested the infrastructure through a seven-day Visa pilot that settled $750,000 in live payment obligations using USDC, with funds reaching Visa in under an hour, including outside banking hours and over a weekend. The bank also participated in tokenized deposit trials involving remortgage payments and an online marketplace simulation, and previously completed a public-blockchain transaction using tokenized deposits to buy a tokenized gilt from Archax on the Canton Network. Lloyds’ Rob Hale said the next stage was to move from individual experiments to shared infrastructure supported by interoperability and common standards. The survey comes as UK authorities and industry groups target a first tokenized government bond by early 2027, an end-to-end tokenized repo transaction by spring 2027 and three digital bond issues in the first quarter of 2027.