UK to Launch First Digital Sovereign Bond by Early 2027
Finance
UK to issue first ‘digital’ bond by early 2027, finance minister says
Britain’s Digital Gilt Initiative and Market Impact
Announcement and Timeline
LONDON, July 14 (Reuters) – Britain aims to become the first major advanced economy to issue a digital sovereign bond by doing so by early next year, finance minister Rachel Reeves said in a speech on Tuesday.
Digital Gilt Instrument Pilot
• Britain’s “Digital Gilt Instrument” pilot was announced in 2024 and tests how distributed-ledger technology could make capital markets more efficient and reduce costs for financial institutions
Further Issuance and Market Plans
• Reeves made the announcement in her annual Mansion House speech in the City of London financial district and said further issuance was planned after the initial sale
Bank of England’s Role
Collateral and Market Operations
• Bank of England Governor Andrew Bailey said at the same event that the BoE will work to ensure the digital gilt can be used as collateral in BoE market operations
Technology Partners
HSBC and Blockchain Platform
• Britain’s finance ministry picked HSBC in February to run the blockchain platform which will be used by the tokenised bond
Reporting and Editing
(Reporting by David Milliken; editing by William James)
Key Takeaways
- The UK government launched the Digital Gilt Instrument (DIGIT) pilot in November 2024 to explore using distributed ledger technology (DLT) across the sovereign debt issuance lifecycle(beta.bankofengland.co.uk).
- HM Treasury selected HSBC’s Orion platform in February 2026 through a competitive process to issue and settle the digitally native gilt within the Bank-FCA Digital Securities Sandbox(hsbc.com).
- The Bank of England supports the initiative, working to enable DIGIT’s eligibility as collateral in market operations and upgrading its systems in 2027 to connect to tokenised asset ledgers(bankofengland.co.uk).
References
Frequently Asked Questions
What is Britain’s Digital Gilt Instrument?
The Digital Gilt Instrument is a pilot program launched by the UK to test digital sovereign bonds using distributed-ledger technology to increase capital market efficiency.
When will the UK issue its first digital sovereign bond?
The UK plans to issue its first digital sovereign bond by early 2027.
Which institution will ensure the digital gilt can be used as collateral?
The Bank of England will work to ensure the digital gilt can be used as collateral in its market operations.
Which entity was selected to run the blockchain platform for the tokenised bond?
HSBC was chosen in February 2024 to run the blockchain platform for the UK’s tokenised bond.
Tags
- Finance
- Banking
- Markets
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