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HM Treasury Confirms UK Will Issue First G7 Digital Gilt by Q1 2027 as HSBC and LSEG Agree Depository Link

  • Writer: Shawn Jhanji
    Shawn Jhanji
  • Jul 17
  • 3 min read
Britain will become the first G7 country to issue a sovereign bond on a public blockchain, after HM Treasury confirmed at Mansion House on 15 July that the Digital Gilt Instrument, known as DIGIT, is on track for issuance by the first quarter of 2027. The announcement, made by Chancellor Rachel Reeves, builds on groundwork laid earlier this year when HSBC's Orion platform was selected through public tender to provide the blockchain infrastructure for the pilot. DIGIT will be a sterling denominated government security issued inside the Bank of England and FCA's Digital Securities Sandbox, the controlled testing environment that has been running live pilots with market participants since 2024.

Britain will become the first G7 country to issue a sovereign bond on a public blockchain, after HM Treasury confirmed at Mansion House on 15 July that the Digital Gilt Instrument, known as DIGIT, is on track for issuance by the first quarter of 2027.


The announcement, made by Chancellor Rachel Reeves, builds on groundwork laid earlier this year when HSBC's Orion platform was selected through public tender to provide the blockchain infrastructure for the pilot. DIGIT will be a sterling denominated government security issued inside the Bank of England and FCA's Digital Securities Sandbox, the controlled testing environment that has been running live pilots with market participants since 2024.


On 16 July, HM Treasury confirmed a further piece of the plumbing. HSBC and the London Stock Exchange Group have signed a memorandum of understanding to build a bilateral Digital Securities Depository link, connecting HSBC Orion, acting as issuer depository, with LSEG's own digital securities depository, acting as investor depository.


The stated aim is interoperability: investors will be able to access and hold DIGIT through either platform rather than being locked into a single rail, and the government intends to list DIGIT on the London Stock Exchange's main market as part of the pilot issuance.


Bank of England Governor Andrew Bailey has said the central bank will work to make DIGIT eligible as collateral in its market operations, a detail that matters more than it sounds. If a tokenised gilt can be pledged in Bank of England repo operations on the same basis as a conventional one, it stops being a novelty product and starts being genuinely usable collateral for the banks and asset managers who will need to hold it.


For a publication built around equity tokenisation, a sovereign bond pilot might look like adjacent territory. It is not. DIGIT is the clearest signal yet that the infrastructure being built for institutional tokenisation, digital securities depositories, sandbox settlement rails, interoperability standards between platforms, is now being tested with the most conservative asset class in the market: government debt. If the plumbing holds up under that test, the same rails become more credible for everything downstream, including the private company shares and SEIS qualifying stock that matter more directly to this publication's readers.


The DIGIT pilot sits alongside the 54 firm tokenisation taskforce that HM Treasury's Wholesale Digital Markets Champion Chris Woolard launched earlier the same week, and the two initiatives are explicitly linked: DIGIT is one of the live use cases the taskforce is expected to build out over the coming year, starting with tokenised repo.


Key Takeaways


  • HM Treasury confirmed on 15 July that DIGIT, a sterling denominated digital gilt, is on track for issuance by the first quarter of 2027, making the UK the first G7 country to place sovereign debt on distributed ledger technology.

  • HSBC's Orion platform will act as issuer depository, with a memorandum of understanding signed on 16 July linking it to a London Stock Exchange Group investor depository for interoperability.

  • The Bank of England has committed to working towards making DIGIT eligible as collateral in its market operations, which would give the instrument genuine institutional utility rather than pilot status alone.

  • DIGIT will run inside the Bank of England and FCA's Digital Securities Sandbox and is expected to list on the London Stock Exchange's main market.

  • The pilot is one of the live use cases feeding into the 54 firm tokenisation taskforce launched by Chris Woolard on 13 July, linking sovereign debt tokenisation directly to the UK's wider wholesale markets tokenisation programme.


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