UK selects HSBC’s blockchain platform for digital bond pilot

The United Kingdom Treasury has selected HSBC Holdings’ (NASDAQ: HSBC) blockchain platform as the provider for its Digital Gilt Instrument (DIGIT) pilot issuance, which will take place under the country’s Digital Securities Sandbox (DSS).

The DIGIT Pilot was launched in early 2025 with the aim of allowing the government to explore how distributed ledger technology (DLT) can be applied to U.K. sovereign debt issuance processes, such as the issuance of digital gilts or government bonds.

The HM Treasury hopes the pilot will also serve to “catalyse the development of U.K. based DLT infrastructure,” as well as boosting the adoption of DLT across local financial markets.

“We want to attract investment and make the U.K. the best place to do business, which is why we are launching DIGIT to understand how the U.K. can capitalise on this technology, deliver efficiencies and reduce costs for firms,” said Lucy Rigby MP, Economic Secretary to the Treasury, in a press release. “This is exactly the kind of financial innovation we need to keep the U.K. at the forefront of global capital markets, and I’m looking forward to working with HSBC and other parties to deliver DIGIT.”

According to HM Treasury, the pilot’s design features include DIGIT being digitally native, short-dated, issued on a platform operating within the U.K.’s DSS, delivering on-chain settlement, and being independent of the government’s main debt management program.

For its part, HSBC said that it welcomed HM Treasury’s decision to choose HSBC Orion, a private blockchain that provides the official record of bond ownership and a framework to manage the instrument and its lifecycle, as the platform provider for the DIGIT pilot issuance.

“Issuing digital gilts and digital corporate bonds on a blockchain has the potential to improve the debt capital markets structure in the U.K., by significantly accelerating transaction settlement times with a more efficient means to issue and trade bonds,” said HSBC. “This places the U.K. in pole position among the G7 nations to issue the first-ever tokenised sovereign bonds on a blockchain.”

According to the bank, HSBC Orion has, to date, enabled the issuance of over $3.5 billion in digitally native bonds globally across sovereign, supranational, central bank, financial institutional, and corporate sectors.

Meanwhile, HM Treasury also announced the appointment of international law firm Ashurst LLP to provide legal services for the DIGIT pilot and support the government in its preparations to launch DIGIT.

The DSS and DIGIT

The DSS was set up in 2023 as a framework for companies to test new tokenization solutions and products under the supervision of the Financial Conduct Authority (FCA) and the Bank of England (BoE). It came into effect in January 2024.

Essentially, it creates a controlled environment that allows companies and authorities to test new technologies in financial markets, overcoming existing regulatory obstacles and fostering innovation in the digital asset industry.

HM Treasury announced it would test the issuance of digital gilts using the DSS back in November 2024, with the program launched the following spring.

In March 2025, the government announced the start of the procurement process for the DIGIT Pilot. The first stage of the procurement process was the Preliminary Market Engagement Notice (PMEN), which sought views from potential suppliers and the wider financial services sector on the delivery of DIGIT.

Based on the feedback received in July, HM Treasury added a further set of features that aim to be tested as part of the pilot, including delivering on-chain settlement, enabling settlement of over-the-counter trades, supporting interoperability, and delivering greater transparency.

This was followed in October by the government issuing its invitation to tender for the DIGIT Pilot, with HSBC now being revealed as the successful bidder.

Watch | IPv6 & Blockchain: Pioneering the next digital revolution