The UK government has tapped HSBC’s blockchain platform to run a pilot to issue digital government bonds, called the Digital Gilt Instrument, or DIGIT.
This move marks a direct step to explore how blockchain technology can improve efficiency in private credit markets.
Reports say legal support for the scheme will be provided by Ashurst LLP, underscoring the difficulty of implementing a regulated token issuance.
Pilot Program Aims to Test On-Chain Settlement
According to reports, the pilot will issue short-term digital gilts in a sandbox monitored by UK financial regulators.
That setup allows officials to monitor issuance, transfer, and payment processes in a distributed ledger while keeping the main credit system intact.
Source: Ledger Insights
HSBC’s Orion platform has previously supported token bond projects abroad and was chosen because it can handle transactions at scale.
The government describes the pilot as its way of testing what works, identifying areas where savings may be made, and clarifying the legality of the new type of bond issuance.
Today we took an important step in releasing 🇬🇧’s 1st Digital Gilt Instrument 💷✨
DIGIT will:
⚙️ Enable faster and more efficient transactions
💸 Lowers costs for firms
🔐 Improve security throughout our financial system– Lucy Rigby KC MP (@LucyRigby) February 12, 2026
According to the UK’s Economic Secretary to the Treasury, Lucy Rigby, “Today we have taken an important step in releasing GB’s 1st Digital Gilt Instrument.” Rigby said he is looking forward to “working with HSBC and other groups to deliver DIGIT.”
Timing and Purchase Process
There has been talk of a digital gilt for months, and that has set the driver back from what was originally expected.
According to sources, the extra time gave the Ministry of Finance the opportunity to evaluate various proposals from different companies: HSBC, London Stock Exchange, and fintech companies.
The decision appears to be an indication of the regulatory approach regulators would like to take, and the government’s intention to avoid surprises in debt litigation.
According to reports, the pilot bonds used in this process should replicate the actual conditions of issuance without jeopardizing the stability of the market.
Image: Deloitte
Pilot goals and metrics
The program will focus on several practical measures: payment speed, storage arrangements, accessibility to the secondary market, and reconciliation of on-chain records with centralized books.
Reports revealed that authorities will closely monitor how automated processes handle the bond’s life cycle and any taxable events that arise.
The results will determine whether the technology is robust enough to be widely adopted and whether operational or legal frameworks need to be adjusted before scaling.
Banks and investors are watching the pilot carefully. They want systems that connect to existing Treasury and clearing operations without adding unnecessary risk.
Reports say the pilot could set the stage for wider use of token debt in the UK, although adoption will depend on measurable operational benefits rather than innovation.
The government sees this as part of a wider effort to maintain the UK’s competitiveness in financial markets and to attract both domestic and foreign investment.
Featured image from Pexels, chart from TradingView
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