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U.K. plans first G7 digital sovereign bond by early 2027
The digital gilt, dubbed DIGIT, would run on HSBC’s Orion platform and is intended to become eligible collateral in Bank of England market operations.
The United Kingdom plans to issue its first digital sovereign bond by early 2027, aiming to be the first G7 country to place government debt on a distributed ledger, according to CoinDesk.
CoinDesk reports the Digital Gilt Instrument, known as DIGIT, will be a sterling-denominated security listed on HSBC’s Orion platform and operating within the Bank of England and Financial Conduct Authority’s Digital Securities Sandbox. The BoE governor, Andrew Bailey, said the central bank plans to make the bond eligible as collateral in market operations, which could support tokenized repo and allow banks to use it in central bank funding transactions.
CoinDesk says the Treasury announced a pilot in 2024 to test whether blockchain infrastructure can reduce settlement times, reconciliation work, and operating costs, and HSBC was appointed to run the platform in February after issuing more than $3.5 billion in digital bonds via Orion. The Treasury has not disclosed details such as bond size, maturity, coupon, investor eligibility, or settlement asset, and the initial sale is expected to be outside the government’s conventional gilt-financing program.
The announcement was made by Chancellor Rachel Reeves in her annual Mansion House speech, CoinDesk adds, with further issuance planned after the initial sale.