The UK Treasury has selected HSBC Orion as the platform partner for the Digital Gilt Instrument pilot. The initiative puts the UK in a position to be the first G7 nation to issue tokenized sovereign bonds using blockchain technology.
According to a Thursday press release, the DIGIT pilot is focused on exploring how distributed ledger technology can be utilized in the issuance of UK sovereign debt. The Treasury aims to develop functional DLT infrastructure and promote its integration into local financial markets through this effort.
HSBC issued a separate release detailing its perspective on the project. The firm stated that introducing digital gilts and digital corporate bonds on a blockchain could improve the efficiency of the UK debt capital markets. It pointed specifically to the potential for substantial reductions in transaction settlement times.
The pilot will feature a digitally native, short-term instrument issued on a platform within the Digital Securities Sandbox. Onchain settlement will be conducted independently of the main government debt issuance schedule. The Treasury is currently working to bring additional suppliers on board to complement HSBC’s role in delivering these features.
