UK Moves Forward With Tokenized Gilt Pilot, Enlists HSBC Orion

The UK Treasury has designated HSBC Orion as the platform provider for its Digital Gilt Instrument pilot. The development clears a path for the UK to become the first G7 member to issue tokenized sovereign debt on a blockchain infrastructure.

A press release issued on Thursday confirmed that the DIGIT pilot is intended to test distributed ledger technology in the context of UK sovereign debt issuance. Establishing a robust DLT framework and stimulating its uptake across the country’s financial sector are stated goals of the project.

HSBC weighed in with its own announcement, asserting that blockchain-enabled digital gilts and digital corporate bonds could drive structural improvements in the UK debt capital markets. The bank specifically emphasized the capability to greatly accelerate transaction settlement times.

The DIGIT pilot will revolve around a digitally native, short-dated instrument. Issuance will occur on a platform operating within the Digital Securities Sandbox. Onchain settlement will function separately from the government’s core debt management activities. The Treasury is actively seeking additional suppliers to collaborate with HSBC on delivering the pilot’s objectives.