UK plans first G7 digital sovereign bond by early 2027
The UK government plans to issue its first digital sovereign bond, known as DIGIT, by early 2027 using blockchain technology. The initiative aims to test the efficiency of digital infrastructure in reducing settlement times and operational costs for government securities.
Why it matters
This move represents a significant step toward the modernization of sovereign debt markets and the integration of blockchain technology into traditional financial systems.
Chancellor Rachel Reeves announced the timeline in her annual Mansion House speech to industry leaders. The government plans further issuance after the initial sale.
The Digital Gilt Instrument, known as DIGIT, will be a sterling-denominated government security issued on HSBC’s Orion platform and will operate inside the Bank of England and Financial Conduct Authority’s Digital Securities Sandbox.
The Treasury announced the pilot in 2024 to test whether blockchain infrastructure could reduce settlement times, reconciliation work and operating costs. HSBC was appointed to run the platform in February, having issued over $3.5 billion in digital bonds through its Orion blockchain.
Speaking 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. That could support tokenized repo and allow banks to use the bond in central bank funding transactions.
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