• Landmark collaboration underscores the UK’s capability to become a global hub for digital asset innovation

Lloyds Banking Group (Lloyds), Aberdeen Investments, and Archax announce a landmark collaboration of their trading businesses to advance the use of cutting edge blockchain technology using tokenised real-world assets (RWAs) as collateral.

In a UK-first initiative, tokenised units of Aberdeen Investment’s money market fund (tMMF) and tokenised UK gilts were used as collateral for foreign exchange (FX) trades between Aberdeen and Lloyds. These digital tokens were issued, transferred, and securely held by Archax – a UK FCA-regulated digital asset exchange – on the Hedera Hashgraph public permissioned blockchain.

The UK trades $5.4 trillion in FX and interest rate derivatives daily, accounting for half of global activity. This trade demonstrates that regulated digital assets can serve as collateral in this market, which is a significant milestone. Digital assets can be programmed to automatically follow the rules of trading agreements streamlining the margining process, reducing operational costs, enhancing collateral efficiency, and minimising counterparty risk.

Wider adoption of tokenised funds as collateral could also help reduce systemic risk during periods of market stress by enabling digital transfers instead of forced asset sales—thereby reducing volatility.

This collaboration between two of the UK’s largest financial institutions and a homegrown regulated fintech marks a major step forward in digital finance. The successful pilot lays the foundation for scaling tokenised collateral solutions, reinforcing the UK’s leadership in next-generation financial infrastructure.

Emily Smart, Chief Product Officer, Aberdeen Investments says: “Tokenisation has long been seen as a key enabler in the new world of digital innovation. That’s why we are delighted to collaborate with Lloyds and Archax, to demonstrate real-world application of on chain collateral movements using tokenised assets. This demonstrates the ability of digital assets to streamline processes and increase efficiency.”

Peter Left, Head of Digital Finance at Lloyds Banking Group, said: “This groundbreaking initiative proves that digital assets can be used in regulated financial markets under existing legal frameworks here in the UK. It’s a major step forward in demonstrating how tokenisation can enhance collateral efficiency, reduce friction, and unlock new trading opportunities.”

Graham Rodford, CEO and co-founder of Archax, adds: “This latest use-case for Nest, our permissioned DeFi collateral transfer network, highlights the power of regulated digital infrastructure to support institutional-grade needs. We’re excited to be partnering with Lloyds and Aberdeen on this initiative and look forward to scaling the use of tokenised RWAs as transferable collateral. This has established another key digital milestone in the foundation for a more open and efficient financial system.”

Source: Aberdeen Investments