The United Kingdom has set an early 2027 target to issue its first digital sovereign bond on distributed-ledger infrastructure, becoming the first G7 country to launch government debt in tokenized form. According to Chancellor Rachel Reeves, the government intends to follow the first issuance with additional digital gilt sales if the pilot progresses as expected. The Digital Gilt Instrument, or DIGIT, will be a sterling-denominated government bond issued on HSBC’s Orion blockchain platform, operating within the Bank of England and Financial Conduct Authority’s Digital Securities Sandbox. The Treasury introduced the pilot in 2024 to examine whether distributed-ledger technology could shorten settlement times, reduce reconciliation work and lower operating costs across government debt markets. HSBC secured the mandate to operate the platform in February after issuing more than $3.5 billion of digital bonds through Orion. ## Key Developments Bank of England Governor Andrew Bailey said the central bank will work toward making DIGIT eligible as collateral in its market operations, supporting tokenized repurchase agreements and allowing banks to use the security in central bank funding transactions. The planned bond sale comes as the UK expands its work on tokenized financial markets beyond pilot projects, with the UK and the United States recently publishing a joint statement committing to closer cooperation on stablecoin regulation, cross-border payments and tokenized finance. The joint statement outlines a framework for regulators to reduce unnecessary barriers to cross-border tokenized financial services, with stablecoins presented as money required to maintain at least a one-to-one backing with high-quality liquid assets
Based on reporting from crypto.news.
