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UK’s tokenized sovereign bond plan depends on on-chain cash settlement
The effort targets a first blockchain-based gilt test by early 2027, but institutional adoption has been stalled for nearly seven years by a lack of standardized on-chain payment methods and regulatory clarity.
Britain’s plan to issue its first tokenized sovereign bond by early 2027 hinges on solving on-chain cash settlement, a bottleneck that has limited institutional use of digital bonds for nearly seven years, according to CoinDesk.
Experts cited by CoinDesk say infrastructure pilots alone will not create a functioning capital market without standardized on-chain payment methods, robust sterling stablecoins, and clear regulation for settlement and custody.
The U.K. initiative is expected to be supported through a test issuance involving HSBC and the London Stock Exchange Group, with momentum tied to responsibility spanning the U.K. Treasury, the Bank of England, and the Financial Conduct Authority.
The timeline arrives amid political change in the U.K., after a new prime minister took office July 20 and replaced the prior chancellor who announced the digital bond plan, as the country carries nearly 3 trillion pounds in outstanding debt, raising questions about whether modernization efforts could change.