In a landmark move for sovereign debt markets, the UK Treasury has officially selected HSBC's digital asset platform, Orion, to spearhead its pioneering digital gilt pilot program. This decision, confirmed in early 2025, represents a critical step in the British government's strategy to modernize its financial infrastructure using distributed ledger technology.
The pilot will test the issuance, distribution, and settlement of digitized government bonds, known as digital gilts or DIGIT, within a controlled environment overseen by the Financial Conduct Authority (FCA). The Treasury first announced its intention to explore digital gilts in October 2024, with Chancellor Rachel Reeves projecting the UK could begin issuing them within two years during her Mansion House speech in November 2024. The formal tender for the project was launched in October 2025.
The initiative aims to assess operational efficiency, reduce settlement risk, and explore the potential for programmable finance. Key anticipated benefits include moving from traditional T+2 settlement to near-instantaneous atomic settlement, enhanced transparency through an immutable record, reduced intermediary costs, and new functionality like fractional ownership.
HSBC's Orion platform, a permissioned blockchain built for institutional clients, was selected after a rigorous evaluation. The platform has already managed digital bonds worth more than $3.5 billion for various clients, including a record-setting $1.3 billion green bond issuance for Hong Kong in 2025. Patrick George, global head of markets and securities services at HSBC, stated the bank is "excited to support the ongoing evolution of the gilt market, encourage market innovation, and support the UK's economic expansion."
City Minister Lucy Rigby endorsed the move, calling it "exactly the kind of financial innovation we need to keep the UK at the forefront of global capital markets." However, the UK is seen as playing catch-up, as jurisdictions like Hong Kong and Luxembourg have already completed digital sovereign offerings.
Experts view the pilot as a strategic inflection point. "The UK's move is less about immediate disruption and more about future-proofing its debt market," explained a senior fintech researcher. The pilot's success could encourage other nations to follow suit and establish new global standards for sovereign bond issuance. It also complements the Bank of England's separate research into a central bank digital currency (CBDC).
Regulatory development is a critical component, with the FCA's observations from the sandbox set to inform future policy for digital securities. John Allan of the Investment Association cautioned that while digital gilts offer immediate settlement, they would still need appropriate legislation and tax treatment to become a regular feature of UK debt markets.
