Lloyds Bank Goes Crypto With HBAR

“Something has truly changed.” We hear statements like a lot, but when it comes in response to a crypto-conversative bank like Lloyds embracing the Hedera blockchain, it just might be true. It also augurs well for the fortunes of Hedera and its native cryptocurrency HBAR.

Ricola63, a top 1% commenter on Reddit, took to the platform early this month to herald the UK banking giant’s recent announcement of “a landmark collaboration” with Aberdeen Investment and digital assets broker Archax “to advance the use of cutting-edge blockchain technology using tokenised real-world assets (RWAs) as collateral.”

Stressing how unlikely such a move was from a “hyper-conservative” UK financial institution like Lloyds Bank, Ricola63 adds: “If they are doing this something has truly changed. They have clearly come to believe there is something important happening in the world of Decentralised Finance and it has matured to the point of usability.”

Blockchain Revolution in Full Swing

Pointing to Lloyds’ decision to use digital tokens held by Archax on the Hedera blockchain as “a powerful signal,” Ricola63 adds: “It’s no small feat to get a UK Bank to use anything resembling leading edge.”

Lloyds Bank has good reasons for getting on board with the cryptocurrency and blockchain revolution, which might more properly be called an evolution, or overhaul, of the financial system.

Lloyds Leads, Archax Backs It Up

In what Lloyds described as “a UK-first initiative,” tokenized forms of Aberdeen Investment’s money market fund were used as collateral in foreign exchange trades between the two companies, with Archax acting as custodian of the tokens.

“These digital tokens were issued, transferred, and securely held by Archax – a UK [financial services watchdog] FCA-regulated digital asset exchange – on the Hedera Hashgraph public permissioned blockchain,” says Lloyds, in what it dubbed “a significant milestone” in forex trading.

“Digital assets can be programmed to automatically follow the rules of trading agreements, streamlining the margining process, reducing operational costs, enhancing collateral efficiency, and minimising counterparty risk,” it adds.

Crypto Ride Just Getting Started

Lloyds is confident that a wider uptake of tokenised funds as collateral “could also help reduce systemic risk during periods of market stress by enabling digital transfers instead of forced asset sales – thereby reducing volatility.”

It also believes this is just the beginning, and that the move paves the way for scaling up the distribution of tokenized assets across the UK.

“The successful pilot lays the foundation for scaling tokenized collateral solutions, reinforcing the UK’s leadership in next-generation financial infrastructure,” adds Lloyds.

UK’s Crypto Surge

The development should put the kibosh on any concerns that the country is lagging behind the US and any other major players when it comes to embracing blockchain solutions.

The UK has surged ahead in its rate of crypto adoption, with nearly a quarter of adults now owning cryptocurrency of one form or another. Last year it was less than one fifth (18 percent).

“This surge surpasses other leading economies and underscores the country’s growing enthusiasm for digital assets,” says Blockchain Council.

Hedera on a Roll – Can it Sustain?

As for Hedera, the US-based publicly distributed blockchain ledger’s prospects in the UK just got a whole lot brighter.

“I suspect that now Hedera has been used in one important ‘first’ it will be far easier to persuade others to follow suit,” says Ricola63, describing the move as “long term […] strongly bullish” for the ledger’s British outlook.

“Experts suggest that this partnership could pave the way for increased interest in Hedera, positioning it ahead of rivals vying for a foothold in UK finance,” says CoinBuzzNow. “The successful transaction execution without issues also boosts confidence among potential followers.”

HBAR Volatility

But will that have a pleasing ripple effect on Hedera’s flagship cryptocurrency? The company’s fortunes center on HBAR, its native in-house digital coin, which enjoyed a 50 percent price hike in July to commence this month hovering around the 25 cent mark. Some analysts are predicting Hedera’s rising good fortunes could drive HBAR above 30. Others are going further and forecasting 70 cents ($0.70).

If that happens then it would be a first for Hedera’s cryptocurrency. Not even during the crypto ‘goldrush,’ when HBAR topped out at 57 cents in 2021, did it enjoy anything like $0.70. Are its best days ahead of it?

Before speculating on HBAR’s fortunes, it might also be worth noting that the digital currency has been through the doldrums of late too. In June it was trading as low as 13 cents ($0.13), a slump that occurred even after 21shares listed a Hedera product on Euronext.

All that said, HBAR did manage to reach the 40-cent mark at the beginning of this year. Doing so again, and going further still, is not beyond the realms of possibility. Especially not in the world of cryptocurrency, where increasingly anything seems possible.

#AI #tokens #cryptocurrency #Lloyds #blockchain #HBAR

Author: Damien Black

The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.

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