In a surprising yet significant move, Lloyds Bank, one of the UK’s most traditionally conservative financial institutions, has partnered with Aberdeen Investment and digital asset custodian Archax to pilot a groundbreaking blockchain-based collateral initiative on the Hedera network. The move marks a UK-first in using tokenized real-world assets (RWAs) as collateral for foreign exchange (forex) trades.
The tokens, representing Aberdeen’s money market funds, were issued and held on the Hedera Hashgraph, a public permissioned blockchain, and managed by FCA-regulated Archax. According to Lloyds, the project aims to reduce operational costs, streamline margining, and minimize counterparty risk through programmable digital assets.
The initiative not only validates blockchain’s practical utility in mainstream finance but also positions Hedera as a serious contender in the race for blockchain adoption in capital markets.
Described as a “significant milestone” by Lloyds, the project could lead to broader adoption of tokenized assets across the UK, with benefits such as reducing systemic risk during volatile periods and enabling real-time collateral transfers.
The announcement has created bullish momentum for Hedera and its native token HBAR, which surged by 50% in July and continues to attract attention. Some analysts predict a possible rally toward $0.70, signaling renewed investor confidence.
Industry watchers see the move as evidence that DeFi has reached a maturity milestone, as legacy institutions begin to trust and utilize decentralized platforms.
With nearly a quarter of UK adults now holding cryptocurrency, the development also underscores Britain’s growing leadership in digital asset adoption, potentially paving the way for similar blockchain applications across the financial sector.
