The UK is moving to test blockchain-based government debt issuance as it expands the use of digital infrastructure in public financing. The planned bond, known as DIGIT, is set to run within the Bank of England and Financial Conduct Authority’s Digital Securities Sandbox on HSBC’s Orion platform.
Highlights
- Chancellor Rachel Reeves announced the UK will issue its first digital sovereign bond, the DIGIT, on HSBC’s Orion platform by early 2027.
- The bond will be tested in the Bank of England’s Digital Securities Sandbox to reduce settlement times, reconciliation work, and operating costs.
- Key DIGIT details including size, maturity, coupon, and investor eligibility remain undisclosed, with the sale sitting outside the conventional gilt-financing program.
Digital gilt structure and launch plan
As reported by CoinDesk, Chancellor Rachel Reeves says the UK plans to issue its first digital sovereign bond by early 2027, which would make it the first G7 country to place government debt on distributed-ledger infrastructure.The sterling-denominated security, called the Digital Gilt Instrument or DIGIT, is set to be issued on HSBC’s Orion platform. It will operate within the Digital Securities Sandbox run by the Bank of England and the Financial Conduct Authority, where authorities are testing whether the technology can reduce settlement times, reconciliation work and operating costs.
The Treasury first announced the pilot in 2024, and HSBC was appointed in February to run the platform. The bank has already issued more than $3.5 billion in digital bonds through Orion.
Market use and implications for UK finance
Bank of England Governor Andrew Bailey says the central bank plans to work on making DIGIT eligible as collateral in its market operations. That would allow banks to use the bond in central bank funding transactions and could support the development of tokenized repo activity.The initial sale is set to sit outside the government’s conventional gilt-financing program. The Treasury has not disclosed the bond’s size, maturity, coupon, investor eligibility or settlement asset, leaving key details of the pilot still to be defined.
In our earlier coverage of the UK’s Digital Gilt Instrument (DIGIT) initiative, we outlined how Britain aims to modernize sovereign debt issuance by using distributed-ledger technology to improve efficiency and lower operating costs. We also noted HSBC’s selection to run the underlying platform and the Bank of England’s intention to make the digital gilt eligible as collateral in its market operations, supporting wider tokenized-asset adoption.
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