Officials position programme to keep UK competitive in global capital markets.
The UK has chosen HSBC’s Orion blockchain platform to run a pilot issuance of tokenised government bonds under the Digital Gilt Instrument (DIGIT) programme, as reported by Reuters. The pilot would mark the country’s first “digital gilt” recorded on distributed ledger technology.
DIGIT is intended to test how tokenisation can modernise sovereign debt workflows, deliver efficiencies, and reduce costs for firms, according to HM Treasury. Officials frame the initiative as part of keeping the UK competitive in global capital markets.
A digital gilt is a UK government bond whose ownership and lifecycle events are recorded on a distributed ledger. Orion, the platform selected for the pilot, was introduced in 2022 and is built on DLT, according to HSBC. The bank reports that Orion has supported over US$3.5 billion in digitally native bonds across public-sector and financial issuers.
In primary issuance, the instrument is created natively on the ledger and distributed to dealers and investors using the platform’s workflows. Prior public transactions demonstrate feasibility, including a GBP 50 million three-year floating‑rate bond issued on‑chain, according to the European Investment Bank.
Settlement and custody processes are handled within the platform’s records, with integration points to existing market participants. Industry stakeholders emphasise that clear legal and tax frameworks are prerequisites for routine adoption, as noted by the Investment Association.
Interoperability is central to sovereign adoption. A sovereign‑grade deployment in another jurisdiction, Luxembourg’s Digital Treasury Certificate, was executed via Orion, according to the Grand Duchy of Luxembourg, indicating cross‑border learnings that can inform DIGIT.
Specialist legal input underpins the UK pilot’s design and execution. “We are proud to have been appointed by HM Treasury to advise on this landmark transaction. Our team brings deep expertise in digital assets transactions, and we look forward to working with HSBC and supporting the government as it takes this transformative step for UK capital markets,” said Etay Katz, Head of Digital Assets at Ashurst LLP.
At the time of writing, HSBC Holdings plc closed at 89.42 with pre‑market at 89.21, based on NYSE delayed quote data. This contextual equity move is independent of the pilot’s scope.
