Lloyds Uses USDC for Visa Settlement, Completing Transfers Within an Hour on Weekends

Lloyds Banking Group has completed live settlement payments with Visa using the dollar-pegged stablecoin USDC, in a move that highlights the potential for stablecoins in inter-institution settlement. The funds arrived within an hour even on weekends.

According to the digital-asset industry on October 2, Lloyds said it completed a pilot on September 30 that transferred a total of $750,000 in real settlement obligations to Visa over seven days using USDC. The transactions were not simulated. The bank sent the funds in several tranches tied to actual payment obligations.

Lloyds purchased USDC through U.K. digital-asset firm Archax, then sent the settlement funds to Visa in the United States via Lloyds Corporate Markets' Jersey branch. Rather than issuing its own stablecoin, the bank used USDC already in circulation.

The pilot covered settlement between financial institutions rather than consumer payments. It shows blockchain-based assets can be used in a financial firm's internal settlement infrastructure even if users do not directly hold stablecoins or create separate wallets.

According to Lloyds, funds sent in USDC reached Visa within an hour even on weekends. Traditional cross-border payments can take more than a day to settle when transactions begin outside banking hours, but stablecoins can enable transfers on holidays as well.

Shorter settlement times could also affect corporate liquidity management. They can reduce the time outgoing funds remain tied up until the next business day and make settlement timing more predictable.

Peter Left, Lloyds' head of digital assets, said settling $750,000 of real payment obligations in stablecoins allowed the bank to test the technology in a live environment. Lloyds did not disclose whether the process reduced fees compared with existing methods or by how much it lowered required settlement funding.