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The UK Treasury has appointed HSBC Holdings Plc’s blockchain platform to manage its upcoming digital gilt pilot, a move officials hope will counter criticism that the government has dragged its feet on digital gilts.
The trial will see the nation issue a digitally native, blockchain-based sovereign debt instrument within a regulated sandbox overseen by the Financial Conduct Authority. By tokenizing the bonds, authorities expect to streamline gilt trading, cut costs, and modernize market infrastructure.
In a statement on Thursday, HSBC said blockchain-based bonds could further strengthen the efficiency of the UK’s capital markets by accelerating settlement times. Patrick George, global head of markets and securities services at HSBC, also noted that they are excited to support the ongoing evolution of the gilt market, encourage market innovation, and support the UK’s economic expansion.
The UK government has increasingly signaled support for financial innovation, particularly in the area of digital assets and tokenization.
Coombes says the digital gilt plan will show the UK is ready to lead in digital finance
During her Mansion House speech in November 2024, Reeves set out plans for a digital gilt trial, projecting the UK could begin issuing digital gilts within the next two years.
She subsequently sought applications to lead the project in October 2025. However, the nation is still behind jurisdictions such as Hong Kong and Luxembourg, both of which have completed digital sovereign offerings, adding to concerns about delays.
Mike Coombes, chief corporate affairs officer at technology provider PrimaryBid, argued that the convergence of digital and traditional finance is in motion, cautioning that the UK could either take a leadership role or end up playing catch-up. He added that through a digital gilt, the UK could codify the legal treatment of digital assets and clearly signal its plan to take an active role in digital finance.
Last month, Ousmène Jacques Mandeng, LSE visiting fellow involved in the digital gilt tender, asserted that the UK must move forward with a decision on the tender and its subsequent development.
Speaking on the digital gilt program, Lucy Rigby, City minister, also said: “This is exactly the kind of financial innovation we need to keep the UK at the forefront of global capital markets. We want to attract investment and make the UK the best place to do business.”
She further noted that the digital gilt initiative would demonstrate how the UK can use this technology to streamline processes and reduce costs for firms.
Allan says they must enact proper legislation for the digital gilts program
However, John Allan, head of innovation and operations at the Investment Association, noted that while digital gilts’ appeal lies in their immediate settlement, they would still need appropriate legislation and tax treatment to become a regular feature of UK debt markets.
He stated, “We’ve been following the digital gilt project very closely since 2023. It’s certainly been a long time coming, and we are very keen that it moves ahead and moves into a longer programme to become the way the government issues its debt.”
So far through its Orion blockchain system, HSBC has managed digital bonds worth more than $3.5 billion for clients, including countries, central banks, and companies. In 2025, it also oversaw a $1.3 billion green bond issuance by Hong Kong, a record-setting digital bond transaction.
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