UK Selects HSBC to Power Digital Gilt Pilot on Blockchain Platform

The UK government has selected HSBC as the platform provider for its pilot issuance of a digital government bond, marking a significant step in Britain’s efforts to modernise capital markets through blockchain technology.

HSBC confirmed that its blockchain based Orion platform will be used to support the pilot scheme, known as the Digital Gilt Instrument. The initiative was first announced in 2024 as part of a broader strategy to explore how distributed ledger technology could improve efficiency and transparency in sovereign debt markets.

The digital gilt pilot is designed to test whether issuing government bonds on a blockchain platform can streamline processes, reduce settlement times and lower operational costs for financial institutions. While details of the timing have not been finalised, the project positions the UK at the forefront among G7 nations experimenting with tokenised sovereign debt.

Patrick George, HSBC’s global head of markets and securities services, said the bank was pleased to support the development of the UK gilt market and the wider economy. He noted that the Orion platform has already facilitated more than 3.5 billion dollars in digital bond issuance globally across sovereign, central bank, financial institution and corporate sectors.

Traditional government bonds, known as gilts in the UK, are typically issued and traded through established clearing and settlement systems. By contrast, tokenised bonds use blockchain networks to record ownership and transactions digitally, potentially enabling faster settlement and greater automation. Advocates argue that such systems could reduce counterparty risk and administrative complexity.

The government has also appointed law firm Ashurst to provide legal services for the pilot. Officials have indicated that the scheme will assess both technological and regulatory considerations before any broader rollout.

Interest in tokenisation has grown steadily across global financial markets, with several central banks and treasuries exploring digital issuance models. However, tokenised debt remains a relatively small share of overall bond markets, and widespread adoption faces legal, technical and operational challenges.

The UK’s move reflects a desire to maintain London’s competitiveness as a global financial centre, particularly as digital assets and financial technology reshape capital markets. By trialling a blockchain based sovereign bond, policymakers hope to gather practical insights into scalability, investor demand and system resilience.

Market participants say the success of the pilot will depend on factors such as investor participation, integration with existing infrastructure and regulatory clarity. If successful, the initiative could pave the way for broader use of distributed ledger technology in public sector financing.

The announcement underscores Britain’s ambition to lead in financial innovation while maintaining oversight and stability in its debt markets.