The UK plans to issue a digital sovereign bond by early 2027, becoming the first of the seven major industrialized countries to place public debt on distributed ledger infrastructure.
Chancellor Rachel Reeves announced the schedule in her annual address at Mansion House to industry leaders. The government plans further issues after the initial sale.
The Digital Gilt Instrument, known as DIGIT, will be a sterling-denominated government security issued on HSBC’s Orion platform and will operate within the Digital Securities Sandbox of the Bank of England and the Financial Conduct Authority.
The Treasury announced the pilot project in 2024 to test whether blockchain infrastructure could reduce settlement times, reconciliation work and operating costs. HSBC was appointed to manage the platform in February, after issuing more than $3.5 billion in digital bonds through its Orion blockchain.
Speaking at the same event, Bank of England Governor Andrew Bailey said the central bank would work to make DIGIT eligible as collateral in its market operations. This could support token repos and allow banks to use the bonds in central bank financing transactions.
Treasury did not disclose the size, maturity, coupon, investor eligibility or settlement assets of the bond. The initial sale will take place outside of the government’s conventional gilt financing program.
