UK selects HSBC for digital government bond pilot

The United Kingdom has chosen HSBC to provide the blockchain infrastructure for its pilot issuance of tokenised government bonds. The initiative represents a major step in modernising sovereign debt markets and places the UK ahead of other G7 countries in experimenting with distributed ledger technology for public financing.

The pilot programme, known as the Digital Gilt Instrument, was first announced in 2024. Its goal is to explore how blockchain technology can improve efficiency within capital markets, streamline settlement processes, and potentially reduce operational costs for financial institutions involved in bond issuance and trading.

A new phase for UK sovereign debt

Through this pilot, the UK government aims to test how distributed ledger systems can support the issuance and management of gilts in digital form. While traditional government bonds are issued and traded through established clearing systems, tokenised bonds use blockchain to record ownership and transactions in a more transparent and automated manner.

At this stage, the government has not confirmed when the first digital gilt will be formally issued using the new platform.

HSBC’s Orion platform

HSBC will deploy its Orion blockchain platform for the project. According to the bank, the platform has already facilitated more than $3.5 billion in digital bond issuances globally. These transactions have included sovereign, central bank, financial institution, and corporate debt offerings.

The bank highlighted that Orion has demonstrated reliable performance in other jurisdictions, reinforcing confidence in its ability to handle a sovereign-level pilot such as the UK’s Digital Gilt Instrument.

Legal framework and advisory support

To support the initiative from a regulatory and legal standpoint, the government has appointed Ashurst LLP to provide legal services for the pilot programme. This ensures that the digital issuance aligns with existing financial regulations while adapting to the technological framework of blockchain-based assets.

Tokenised debt still a small segment

Although global interest in tokenising traditional financial instruments is increasing, digital bonds still represent a very small share of the overall debt market. Most sovereign and corporate bonds continue to be issued through conventional systems.

However, initiatives such as the UK’s pilot suggest that major economies are actively exploring how blockchain could reshape capital markets infrastructure in the coming years.

If successful, the project could accelerate broader adoption of digital sovereign debt and encourage other G7 countries to follow a similar path.