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Lloyds Banking Group is pushing for an overhaul of Britain’s financial system to put customer deposits on blockchain, a change its chief executive says could help rethink the way Britons buy and sell homes.
Charlie Nunn said combining token deposits with artificial intelligence could spark a change in the financial services industry as big as the invention of the smartphone.
Nunn told the Financial Times Global Banking Summit: “If you mix these two technologies, if you think about digital assets and tokenized deposits with AI, you can suddenly rethink important parts of financial services. »
He added that the UK’s largest mortgage provider plans to combine technology with AI models to significantly reduce the time spent buying homes and eliminate the various middlemen involved in the process.
“Take mortgages, the whole process of transferring ownership, sharing documents, exchanging values and paying can be integrated into a smart contract, and the whole thing can be guided with or without a broker, with an agent giving advice to clients,” he said.
“You can completely rethink buying and selling homes with these two technologies.”
Tokenized deposits are representations of an actual customer deposit on the blockchain backed by institutional or retail deposits. Supporters say the technology combines the efficiency and speed of blockchain technology with a greater degree of regulation and reliability than other forms of digital currency such as stablecoins.
Nunn said that, combined with AI, the technology could be akin to the advent of the smartphone. “Over the next five years, using these technologies could be that mind-blowing moment where you suddenly realize it’s more personalized, more intuitive and easier to get what you need from your financial services provider.»
Nunn said US President Donald Trump’s Genius Act, which regulates another form of digital token called stablecoins, had been a “wake-up call” that would lead to the proliferation of the technology in other jurisdictions.
A stablecoin is similar to a cryptocurrency, but it is linked to a traditional currency and is supposed to be backed by safe assets such as government debt.
Nunn said tokenization was preferable to a stable version of the pound and said the bank hoped to roll out a widespread token system by 2027.
“So it’s going to perform much better than a stablecoin, a sterling-based stablecoin that’s emerging domestically, because it will still be instantaneous but it will have all the protections,» he said.
Nunn added: “We have already tested the technology system-wide across the UK. No other system in the world, in China, Singapore, India… in the last 10 or 15 years has come close to this,” Nunn said.
Nunn added that advances in digital finance would help drive growth in the UK, where he said businesses still lack confidence.
Lloyds is the UK’s largest retail bank and is often seen as a bellwether of the UK economy. Nunn said there remained several factors that were “crowding” the UK economy when it comes to investment, such as high energy costs, regulatory burden and high labor costs.
“I think collectively, between government, the financial sector and business, we really need to focus on getting businesses to invest again, because that’s where we’ll see productivity and that’s where we’ll see growth.”
