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Lloyds Banking Group has completed three transactions using tokenised commercial bank deposits to test real-value cross-border payments between British pounds, euros, and Swiss francs.

The main test involved converting Swiss francs into British pounds, with Lloyds Bank acting as the settlement bank for the sterling leg. Foreign exchange conversion, payment, and settlement occurred on a shared digital ledger, allowing the transaction to happen at once instead of in separate steps.

This method showed that tokenisation could make cross-border payments more efficient than traditional systems, which handle each function in isolation. The group stated the approach reduces friction and settlement risk in wholesale payments.

In two additional transactions, Lloyds acted as a customer bank, replicating the workflow with euros and Swiss francs. These tests checked interoperability when sending and receiving digital tokens with other international participants.

All three transactions were part of Project Agorá, a public-private initiative launched in April 2024. The project is led by the Bank for International Settlements and the Institute of International Finance, involving over 40 private financial institutions.

Peter Left, head of digital and markets innovation at Lloyds Banking Group, said moving from prototypes to live transactions marked progress in understanding how tokenised deposits could function in real payment scenarios. “It gives us valuable practical insight,” he added.

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The bank has explored tokenised assets for years. In July 2025, it worked with Abrdn and Archax to trial tokenised money market fund units and gilts as collateral for live foreign exchange trades. Earlier in 2025, Lloyds completed what it described as the UK’s first public blockchain transaction, using tokenised British pound deposits on the Canton Network to purchase a tokenised gilt from Archax.

These trials reflect a growing interest among financial institutions in distributed ledger technology to improve settlement processes. While still experimental, the tests indicate tokenisation may eventually cut delays and costs in cross-border payments.

Efforts currently target wholesale payments, where settlement risks and inefficiencies are most pronounced. If successful, the same principles could later extend to retail transactions, but regulators and banks must still resolve issues around scalability, security, and compliance.

Left noted that live tests help identify practical challenges.

Project Agorá aims to create a framework for seamless cross-border transactions.

Lloyds’ earlier experiments set the stage for these latest trials. The bank’s work with Archax demonstrated how blockchain could simplify asset transfers, while the money market fund trial explored new ways to use tokenised collateral.