How Banks Are Using Blockchain to Change Finance

Blockchain is not just about cryptocurrencies anymore. Big banks like Lloyds are using this technology to make their services better. While many people talk about Bitcoin and other digital currencies, Lloyds is doing something different. They are using blockchain to make banking faster and more efficient. In late 2025, Lloyds announced that they had tested tokenized deposits in the UK. These are digital versions of real money that can be moved quickly and securely. The bank's CEO, Charlie Nunn, said that this technology could change how mortgages work. He believes it could cut the time it takes to buy a home from weeks to just days. This is a big deal because it could make buying a home much easier for everyone. Lloyds is not the only bank doing this. Other big banks like JPMorgan and BlackRock are also using blockchain. They are not trying to replace traditional banking with decentralized finance (DeFi). Instead, they are using blockchain to make their existing services work better. This is interesting because it shows that blockchain can be used in different ways. Tokenized deposits are different from what DeFi offers. DeFi platforms like Aave let people borrow and lend money without any central authority. This can be fast and accessible, but it also comes with risks. If something goes wrong, there is no customer service to help. Lloyds and other banks are trying to use blockchain to get the benefits of DeFi while keeping the safety and security that people expect from traditional banks.Lloyds has already shown that blockchain can be used for more than just deposits. In mid-2025, they completed a transaction using tokenized money market funds and government bonds. This was done on a public blockchain called Hedera Hashgraph. This shows that blockchain can be used for real-world assets, not just digital currencies. The use of blockchain in traditional finance is growing fast. In 2025, the amount of money in tokenized funds grew by over 100%. Big banks like JPMorgan and BlackRock are also getting involved. They are using blockchain to make their services more efficient and secure. DeFi and traditional finance are both using blockchain, but they are doing it in different ways. DeFi is about giving people more control and access to financial services. Traditional finance is about making existing services better. Both have their pros and cons. DeFi is more open and accessible, but it can be risky. Traditional finance is more secure, but it can be slower and less flexible. Lloyds' plans to use blockchain for mortgages show how traditional finance is changing. They are using blockchain to make the process faster and more efficient. This could be a big step forward for the banking industry. It shows that blockchain can be used to improve traditional services, not just replace them. The future of finance is not just about choosing between DeFi and traditional finance. It is about finding ways to use blockchain in the best way possible. Lloyds' use of blockchain shows that traditional banks are taking this technology seriously. They are not trying to crush it but to use it to make their services better. This could be a big win for everyone.