The UK plans to become the first major advanced economy to issue a digital Gilt, with the inaugural issuance expected by early 2027.
Speaking at the Mansion House dinner yesterday, chancellor Rachel Reeves said: “I can announce that by early next year, the UK is set to become the first G7 country to issue a Digital Sovereign Bond, with plans for future issuance to come.”
The Digital Gilt Instrument (DIGIT) will be a sterling-denominated government security issued on HSBC’s Orion platform, which has enabled the issuance of more than $3.5bn (€3bn) of digitally native bonds across sovereign, supranational, central bank, financial institution and corporate issuers.
HSBC’s Orion platform secured the government contract in February, following the announcement of the DIGIT initiative in 2024, to test how distributed ledger technology could improve capital market efficiency and reduce costs for financial institutions.
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.
The announcement forms part of the UK government’s broader strategy to position the country as a leader in tokenised financial markets.
Faye Clark, head of manager research at XPS, said that if the ambition to issue a digital sovereign bond by early 2027 is realised, digital assets could enter the mainstream more quickly than anticipated.
However, Clark warned that significant work remains.
She explained: “Firstly, investor education will be critical, so that investors understand both the opportunities and the risks of digital assets. Secondly, the supporting infrastructure will need to mature, including the practical ability to access, hold and trade digital assets. In many cases, for example, investors will require access to appropriate digital wallet solutions in order to access this market.”
Clark added that while a digital sovereign bond may not transform portfolios immediately, it would be an important signal of intent.
She said: “It could build momentum for wider adoption, including future opportunities in tokenised private market assets.”
