Lloyds and Visa pilot stablecoin settlement for cross-border payments

Distributed ledger technology (DLT) is transitioning from experimental market use to practical treasury applications. A report by the Association for Financial Markets in Europe (AFME) and the European Association of Corporate Treasurers (EACT) indicates that DLT, tokenization, and AI are poised to transform payments, liquidity management, and access to capital markets.

The research highlights four primary near-term opportunities: faster and more predictable payments, more productive use of cash and collateral, improved working-capital and supply-chain finance, and more flexible access to funding. These advancements could reduce the time between payment instructions and usable cash while minimizing the need for liquidity buffers.

In a practical application of these technologies, Lloyds Banking Group and Visa recently completed a seven-day live pilot testing cross-border settlement via stablecoins. During the trial, Lloyds used stablecoins to settle $750,000 in payment obligations with Visa. The funds, booked through Lloyds’ Corporate Markets branch in Jersey, reached Visa in the United States in under an hour, even during a weekend. The pilot utilized different blockchain networks to test interoperability, demonstrating how digital assets can work alongside existing banking infrastructure to increase speed and transparency in international business transactions.