British lender Lloyds Banking Group is claiming bragging rights for completing the first U.K. gilt purchase using tokenized deposits, or blockchain representations of fiat currency bank deposits.

Lloyds, the third-largest bank in the country by market capitalization, said it enlisted the help of crypto trading platform Archax and the privacy-focused Canton Network to buy the government debt. The bonds' name refers to the old gold-edged certificates.

The purchase illustrates how tokenization can transform traditional banking, turning real-world assets into digital forms that can be purchased, sold or transferred instantly, Lloyds said in a press release.

The transaction involved the company's Lloyds Bank plc unit issuing tokenized deposits on the Canton Network. Then Lloyds Bank Corporate Markets used the deposits to pay for a tokenized gilt from Archax. Finally, Archax moved the underlying funds back into its regular Lloyds account, the release said.

“This transaction offers a glimpse into the future of finance; faster, smarter, and more efficient," Surath Sengupta, head of transaction banking products at Lloyds, said in a statement. "Tokenisation allows us to bring real-world assets onto blockchain infrastructure, creating opportunities for businesses to transact with greater speed, transparency, and flexibility.”

Sengupta pointed out that tokenized deposits can continue to earn interest and remain in the Financial Services Compensation Scheme deposit protection program, so these advantages — instant settlement, automated agreements, improved transparency and security — come without losing the benefits of traditional cash.