HSBC Wins Government Tender for Digital Gilts Pilot

The UK Government has selected HSBC Holdings plc to provide the core platform for its Digital Gilt Instrument (DIGIT) pilot issuance, marking a major step toward testing blockchain technology for sovereign debt issuance. The pilot — part of HM Treasury’s Wholesale Financial Markets Digital Strategy — will explore whether distributed ledger technology (DLT) can make the issuance, distribution and settlement of UK government bonds (“gilts”) more efficient and cost-effective.

HSBC’s Orion blockchain platform, already used for multiple tokenised bond transactions globally, was selected following a competitive tender process initiated by HM Treasury in October 2025. By anchoring the DIGIT pilot on a market-ready DLT platform within the UK’s Digital Securities Sandbox, the government aims to test digitally native gilts that could improve transparency, reduce reconciliation costs and speed up settlement compared with traditional systems.

Lucy Rigby KC MP, Economic Secretary to the Treasury, emphasised the initiative’s role in making the UK an attractive destination for investment and financial innovation. HSBC said it was delighted to support the development of the gilt market and broader UK economy with its market-leading digital assets infrastructure.

Key Highlights

• Government tender awarded: HSBC was chosen to provide the platform for the UK’s Digital Gilt Instrument (DIGIT) pilot.
• Blockchain platform: The Orion blockchain platform will support issuance and settlement of digitally native gilts.
• Pilot scope: DIGIT is designed to test the use of distributed ledger technology across sovereign debt lifecycle processes.
• Regulatory project: The pilot will be run within the Digital Securities Sandbox overseen by the UK regulator.
• Secondary services: Law firm Ashurst LLP was also appointed to support legal aspects of the pilot.
• Strategic ambition: The project reflects the UK’s drive to modernise capital markets and explore digital asset infrastructure.

What the Digital Gilt Pilot Is About

The Digital Gilt Instrument (DIGIT) pilot aims to test the issuance, distribution and settlement of digitally native government bonds using blockchain or distributed ledger technology (DLT) — a departure from conventional sovereign debt markets that rely on legacy systems.

The pilot is intended to provide insights into whether DLT can:

• Accelerate settlement times — potentially shortening the traditional one to two-day settlement cycle.
• Reduce operational complexity and costs for market participants.
• Improve transparency and reconciliation across the bond lifecycle.

DIGIT issuance is expected to be a digitally native, short-dated instrument operating within the UK’s regulatory sandbox, independent of the government’s conventional debt management programme.

Why This Matters

Modernising Sovereign Debt Markets

Governments around the world are exploring tokenisation — representing financial instruments as digital tokens on a blockchain — to modernise capital markets. For sovereign debt, this could enhance settlement efficiency, reduce back-office costs and broaden access for institutional and retail investors.

If successful, the UK could become one of the first G7 countries to pilot tokenised government bonds, reinforcing London’s position as a leading financial centre while fostering innovation in digital assets infrastructure.

HSBC’s Role and Track Record

HSBC’s Orion platform has been used in more than US$3.5 billion of digital bond issuances worldwide — including sovereign and corporate issuance across multiple jurisdictions — showcasing readiness for large-scale digital debt operations.

HSBC’s involvement positions the bank as a key partner in blending traditional fixed-income markets with cutting-edge digital technology, potentially lowering barriers for new market entrants and enhancing liquidity.

#DigitalGilts#SovereignDebt#UKTreasuryblockchainCapitalMarketsfintechHSBCTheFinRate