The UK plans to issue a digital government bond in early 2027, becoming the first of the seven leading industrialized nations to place government debt on a distributed ledger infrastructure.
Chancellor Rachel Reeves announced the timeline in her annual Mansion House speech to industry leaders. The government plans further issuance after the first sale.
The Digital Gilt Instrument, known as DIGIT, will be a sterling government security issued on HSBC’s Orion platform and will operate in the Bank of England and the Financial Conduct Authority’s Digital Securities Sandbox.
The Ministry of Finance announced the pilot project in 2024 to test whether blockchain infrastructure could reduce settlement times, reconciliation work and operational costs. HSBC was appointed to operate the platform in February after issuing over $3.5 billion in digital bonds through its Orion blockchain.
At the same event, Bank of England Governor Andrew Bailey said the central bank will work to make DIGIT eligible as collateral in its market operations. It could support tokenized repo and allow banks to use the bond in central bank funding transactions.
The Ministry of Finance has not disclosed the bond’s size, maturity, coupon rate, investor eligibility or settlement assets. The first sale will be outside the government’s conventional gilt financing program.
