Lloyds Banking Group has completed a live pilot with Visa using the dollar-backed stablecoin USDC to settle real payment obligations, testing how blockchain-based assets could work in inter-institution settlement. The bank said transfers reached Visa within an hour, including on weekends.
According to Lloyds, the pilot was completed on September 30 and involved $750,000 sent over seven days. The payments were not a simulation: the bank said it transferred several tranches tied to actual settlement obligations owed to Visa.
How the pilot was structured
Lloyds said it bought USDC through UK digital-asset firm Archax and then sent the funds to Visa in the United States via Lloyds Corporate Markets' Jersey branch. Instead of creating a proprietary token for the test, the bank used USDC already in circulation.
The exercise focused on settlement between financial institutions rather than on retail or consumer payments. In effect, Lloyds used stablecoins as part of back-end settlement infrastructure, without requiring end users to hold stablecoins or operate separate wallets.
Why settlement speed matters
According to Lloyds, the transfers arrived within an hour even when sent on weekends. That is a notable contrast with traditional cross-border payment processes, which can take more than a day to settle when instructions are initiated outside normal banking hours.
The bank said the test points to the potential for stablecoins to support transfers on weekends and holidays as well. Faster settlement could also change how firms manage liquidity by reducing the period during which outgoing funds are tied up while waiting for the next business day.
A live test rather than a paper exercise
Peter Left, Lloyds' head of digital assets, said settling $750,000 of real obligations in stablecoins gave the bank a way to evaluate the technology in a live operating environment. That distinction matters because the pilot was based on actual payment flows rather than hypothetical transactions.
At the same time, Lloyds did not disclose whether the USDC-based process lowered fees compared with existing methods. The bank also did not say by how much, if at all, the pilot reduced the amount of funding needed to support settlement.
What the pilot shows next
The pilot does not mean Lloyds is moving stablecoins into consumer payments, based on the details it released. Instead, the confirmed result is narrower: the bank demonstrated that an existing stablecoin could be used to move real settlement funds between institutions tied to Visa obligations.
For now, the clearest takeaway is operational. Lloyds has shown that live settlement using USDC can be completed in multiple tranches over a week and can reach the recipient within an hour, including outside standard banking hours. Whether that translates into lower costs or broader adoption remains undisclosed.
Source: en.bloomingbit.io