HSBC was selected by HM Treasury to spearhead a trial for launching tokenized sovereign bonds, referred to as Digital Gilt Instruments (DIGIT) .This trial will take place within the Bank of England’s digital testing environment, with the goal of evaluating distributed ledger technology (DLT) for national debt in order to enhance settlement speed, lower expenses, and increase liquidity .
The UK government has selected HSBC’s Orion blockchain platform to host the issuance of DIGIT, its proposed digital gilt pilot. Legal support for the transaction will be provided by Ashurst LLP. According to HSBC, Orion has already facilitated more than US$3.5 billion in digitally native bond issuance across a wide spectrum of issuers, including sovereigns, supranationals, central banks, financial institutions and corporates.
Lucy Rigby, the UK’s Economic Secretary to the Treasury, said the government’s goal is to attract investment and strengthen the country’s standing as a global financial hub. She emphasized that the pilot will help authorities assess how distributed ledger technology (DLT) can enhance efficiency and reduce costs for market participants. From HSBC’s side, Patrick George, Global Head of Markets & Securities Services, described the bank as “delighted” to support both the evolution of the gilt market and wider financial innovation.
Importantly, the DIGIT pilot will operate within the Bank of England’s digital sandbox, a supervised live testing environment designed to allow regulators and private-sector participants to trial new financial infrastructure under controlled conditions.
The key role oh HSBC in UK financial hub
The platform supported the European Investment Bank’s digital sterling bond in 2023, followed by Hong Kong’s multi-currency digital green bond in 2024. In 2025, it facilitated digital treasury certificates for the Grand Duchy of Luxembourg, as well as one of the largest digital sovereign green bond issuances to date, a multi-currency offering equivalent to US$1.3 billion.
Those findings will inform whether regulatory adjustments or legislative changes are necessary to integrate tokenized issuance into the UK’s mainstream debt capital markets. The timeline suggests a cautious but deliberate approach, balancing innovation with financial stability and legal clarity.
A move toward tokenized gilts could reshape settlement mechanics, custody frameworks and secondary-market liquidity dynamics. Treasury managers, asset allocators and ETF operators will be watching closely, as changes to issuance and settlement workflows may alter how cash and securities move through the system, potentially compressing settlement cycles and reducing operational frictions if the pilot proves successful.
