UK Treasury Taps HSBC for Blockchain-Based Sovereign Bond Pilot
The UK Treasury has selected HSBC Orion to provide the platform for the Digital Gilt Instrument pilot. This decision positions the United Kingdom to become the first G7 country to experiment with tokenized sovereign debt issued on a blockchain.
Details released on Thursday indicate that the pilot, named DIGIT, is intended to examine how distributed ledger technology can be applied to the issuance of UK government debt. A central objective is the creation of DLT infrastructure that can support and drive adoption within domestic financial markets.
In its own announcement, HSBC described the potential impact of the technology. The bank stated that blockchain-based issuance of digital gilts and digital corporate bonds could enhance the structure of the UK debt capital markets. It highlighted the prospect of dramatically faster settlement times for transactions as a primary advantage.
The structure of the DIGIT pilot involves a digitally native, short-dated instrument. It will be issued on a platform hosted inside the Digital Securities Sandbox, with settlement conducted onchain and separate from the regular government debt program. The Treasury continues to engage with other suppliers to deliver the necessary capabilities in coordination with HSBC.
