UK picks HSBC Orion platform for first digital sovereign bond

The United Kingdom has set an early 2027 target to issue its first digital sovereign bond on distributed-ledger infrastructure, becoming the first G7 country to launch government debt in tokenized form.

Summary

• The UK plans to issue its first blockchain based sovereign bond by early 2027 through HSBC’s Orion platform.
• The Digital Gilt Instrument will operate inside the Bank of England and FCA Digital Securities Sandbox.
• The move comes as the UK expands cooperation with the US on stablecoins, tokenized assets and cross border financial markets.

According to Chancellor Rachel Reeves, who announced the plan during her annual Mansion House speech, the government intends to follow the first issuance with additional digital gilt sales if the pilot progresses as expected.

The Digital Gilt Instrument, or DIGIT, will be a sterling-denominated government bond issued on HSBC’s Orion blockchain platform. It will operate within the Bank of England and Financial Conduct Authority’s Digital Securities Sandbox, a testing environment created for digital securities.

The Treasury introduced the pilot in 2024 to examine whether distributed-ledger technology could shorten settlement times, reduce reconciliation work and lower operating costs across government debt markets. HSBC secured the mandate to operate the platform in February after issuing more than $3.5 billion of digital bonds through Orion.

Speaking at the same event, Bank of England Governor Andrew Bailey said the central bank will work toward making DIGIT eligible as collateral in its market operations. According to Bailey, that step could support tokenized repurchase agreements while allowing banks to use the security in central bank funding transactions.

The Treasury has not disclosed the size, maturity, coupon, investor eligibility, or settlement asset for the bond. Officials said the initial issuance will sit outside the government’s conventional gilt financing program.

Digital bond plans follow tokenization push

The planned bond sale comes as the UK expands its work on tokenized financial markets beyond pilot projects.

Earlier this week, the UK and the United States published a joint statement committing to closer cooperation on stablecoin regulation, cross-border payments and tokenized finance through the Transatlantic Taskforce for Markets of the Future.

According to the joint statement, both governments plan to explore how regulated stablecoins issued in one country could access the other market while maintaining separate domestic regulatory frameworks. The two countries also agreed to seek common approaches for tokenized securities settlement and examine whether stablecoins or tokenized money market funds could serve as collateral in clearing markets.

The statement said stablecoins presented as money should maintain at least a one-to-one backing with high-quality liquid assets, while reserve assets should remain separate from issuers’ corporate funds. Officials also said holders should receive timely redemptions and clear legal protections if an issuer fails.

Although the stablecoin agreement does not create automatic market access or mutual recognition, it outlines a framework for regulators to reduce unnecessary barriers to cross-border tokenized financial services while each country completes its own regulatory process.