Britain is positioning itself to become the first G7 country to issue sovereign debt on blockchain, appointing banking giant HSBC and law firm Ashurst to lead a digital gilt trial expected this year, according to the Financial Times.
The Treasury’s selection of the two companies is aimed at allaying growing criticism that the UK is dragging its feet on token government bonds. While Chancellor Rachel Reeves unveiled the pilot plan in late 2024, other jurisdictions, including Hong Kong, have already crossed the finish line with their own digital sovereign issuances.
The pilot project aims to reduce settlement times and operational costs for market participants. The experiment will take place in the Bank of England’s ‘digital sandbox’, a controlled environment where financial innovations can operate under relaxed regulatory constraints.
HSBC has experience in digital debt offerings, having orchestrated more than $3.5 billion in digital bond issuances through its proprietary Orion blockchain – including last year’s $1.3 billion Hong Kong Green Bond, one of the largest tokenized debt sales in the world.
On Wednesday, Hong Kong Finance Secretary Paul Chan Mo-po said the multi-currency offering helped increase the liquidity of the product.
“We will regularize the issuance of tokenized green bonds,” he said at CoinDesk’s Consensus conference in Hong Kong, which could support further adoption.
