UK premiere: Tokenized deposits meet government bonds on the Canton Network
- Lloyds and Archax hatten on January 7th in Great Britain together dhe first tokenized bank deposit transaction on a public blockchain.
- One bought a government bond with tokenized pound sterling deposits – a Milestone for regulated financial markets through PoW.
Lloyds Banking Group, one of the UK’s largest banks, and Archax, a fully regulated digital asset marketplace, shared a technological first on the Canton Network, a public blockchain network designed specifically for regulated financial markets. At the center of the campaign were two digital assets.
The initial situation
Firstly, Lloyds issued sterling bank deposits as tokens on a public blockchain for the first time. These tokenized deposits are fully backed by real-world FIAT bank deposits and are considered safer and more “reputable” from a regulatory perspective than stablecoins.
On the other hand, Archax had issued a tokenized British government bond, which also exists on the blockchain. The special thing is that the two asset derivatives interacted with each other for the first time in a real, regulated transaction.
The transaction
Lloyds Bank PLC issued the tokenized deposits on Canton, which were subsequently used by Lloyds Bank Corporate Markets to purchase the tokenized government bond from Archax. The entire transaction took place entirely on-chain, while the connection to the traditional bank accounts of Lloyds customers remained intact. For the first time, the token of a British government bond was purchased with tokenized pound sterling deposits. That was the milestone.
The financial industry is increasingly moving towards digitized assets that enable fast settlement, low risk and high transparency. Tokenized deposits are considered particularly promising because they combine the security of traditional bank deposits with the efficiency of blockchain technology.
The transaction shows that traditional bank accounts, regulated digital assets and public blockchains can interact directly and smoothly. This is a crucial step so that blockchain technology can be integrated into the classic financial market without being undermined by regulatory standards.
The meaning
The transaction shows how capital markets can work in the future: fully digital, efficient, transparent and available around the clock. Lloyds and Archax have taken a historic step by completing a regulated financial transaction involving real-world assets entirely on a public blockchain for the first time.
So it works. One day, when DeFi and TradFi have finally merged, something completely new will have emerged that we don’t yet know what it will look like – but it will be simpler and safer.
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