Visa & Lloyds test stablecoin settlement for USD $750,000

Visa and Lloyds Banking Group have completed a live pilot using stablecoins for cross-border settlement, involving USD $750,000 in payment obligations between the two groups.

The seven-day test examined whether stablecoin-based settlement could help financial institutions move funds more quickly outside conventional banking hours. The companies said the funds reached Visa in under an hour, including over a weekend.

The work focused on settlement rather than the front-end payment made by a customer or business. Settlement is the process by which financial institutions exchange funds to complete and reconcile payment activity.

Lloyds used USDC acquired through Archax, a UK-regulated digital asset exchange, to meet a series of US dollar settlement obligations. The volume was booked through Lloyds' Corporate Markets branch in Jersey before being transferred to Visa in the United States.

The pilot tested how stablecoins could sit alongside existing settlement arrangements rather than replace them outright. It also examined operational issues such as transfer timing, visibility of fund movements, and the practical steps involved in completing transactions.

Round-the-clock access

Cross-border settlement often depends on banking cut-off times, which can delay transfers initiated late in the day or over holidays and weekends. That can leave businesses and banks waiting for confirmation that funds have arrived, while tying up liquidity in the meantime.

The pilot showed how stablecoins might allow some transactions to be settled around the clock. For treasury teams, that could affect how companies manage working capital, meet payment obligations, and monitor the location of funds at any given time.

The test also explored settlement across different blockchain environments. Lloyds used its own node on Canton, a private network, while Visa supported settlement on a separate public blockchain.

The arrangement was intended to test interoperability between private and public blockchain systems, an important issue as financial institutions consider how digital forms of money might operate across multiple networks rather than within a single closed system.

Digital money

The project forms part of Lloyds' broader work on digital assets and tokenised money in business-to-business and institutional payments. Large financial groups have been assessing whether blockchain-based settlement tools can shorten settlement times and provide clearer tracking of funds in transit.

Stablecoins are digital tokens designed to hold a steady value against an underlying asset, usually a fiat currency. In this case, the pilot used a stablecoin linked to the US dollar.

Peter Left, Head of Digital Assets at Lloyds Banking Group, said: "Stablecoins could be particularly valuable for cross-border payments, where moving money between markets, currencies and infrastructures can add time and complexity. Settling $750,000 of live payment obligations between Lloyds and Visa using stablecoins has allowed us to move beyond theory and test these capabilities in a real-world setting.

"We're seeing how digital money could help make international payments faster, more transparent and more flexible for businesses. Greater visibility and certainty over the movement of funds can transform liquidity management, while interoperability between blockchain networks helps unlock future applications of digital money at scale."

Visa has been expanding its work on digital settlement and tokenised forms of money as banks and payment networks examine how existing systems may interact with blockchain-based alternatives. Its role in the trial was to help simplify the settlement process for institutions exploring the use of stablecoins.

"Businesses increasingly operate across borders and around the clock, but the infrastructure behind the movement of money has not always offered the same flexibility. This pilot with Lloyds shows how stablecoins can work alongside existing banking infrastructure to give financial institutions more choice over how and when they settle funds. Visa's role is to help make these new forms of money practical, interoperable and trusted at scale," said Rob Cameron, Group Country Manager, UK & Ireland.