UK Government Appoints HSBC to Lead Digital Gilt Instrument Pilot Issuance in London as Part of Ambitious Financial Markets Reform

The UK government has officially selected HSBC to provide the platform for its upcoming Digital Gilt Instrument pilot, better known as DIGIT.

The decision follows a competitive procurement process that began last year, with several suppliers submitting bids after the Treasury issued its invitation to tender in October 2025.

After reviewing proposals against published assessment criteria, officials chose HSBC’s digital assets platform, Orion, to run the pilot issuance.

It marks a notable moment in the government’s broader effort to modernise wholesale financial markets and experiment with distributed ledger technology in sovereign debt issuance.

Why DIGIT Matters for the UK

DIGIT is not just another technical experiment.

It sits at the heart of the government’s Wholesale Financial Markets Digital Strategy, a plan designed to ensure the UK remains one of the world’s most influential and competitive financial centres.

At Mansion House last year, ministers outlined ambitions to make the instrument accessible to a broad range of participants and to support the development of secondary markets.

In other words, the aim is not simply to issue a digital gilt, but to build a workable ecosystem around it.

Other major financial centres, including those in Europe and Asia, have already tested blockchain-based bond issuances.

By moving now, the UK is positioning itself to compete in what many see as the next evolution of capital markets infrastructure.

What the Pilot Is Designed to Test

The DIGIT pilot has two central goals.

First, it will allow the government to explore how distributed ledger technology, or DLT, can be applied to the process of issuing UK sovereign debt.

That includes everything from issuance mechanics to settlement and lifecycle management.

Second, it aims to encourage the development of UK-based DLT infrastructure and accelerate adoption of digital ledger systems across domestic financial markets.

The design is deliberate. DIGIT will be digitally native, short-dated, and issued on a platform operating within the UK’s Digital Securities Sandbox.

Settlement will happen on-chain, meaning transactions are recorded and completed directly on the distributed ledger.

Importantly, the pilot will sit outside the government’s main debt management programme, limiting systemic risk while allowing space for experimentation.

A Push for Efficiency and Lower Costs

Lucy Rigby KC MP, Economic Secretary to the Treasury, made it clear that the motivation is both strategic and practical.

The government wants to attract investment and strengthen the UK’s reputation as a top destination for business.

According to Rigby, DIGIT is about understanding how new technology can deliver efficiencies and reduce costs for firms operating in capital markets.

If DLT can streamline settlement processes, reduce intermediaries, and cut administrative burdens, the long-term savings could be significant.

For the UK, which has long relied on the strength of its financial services sector, innovation of this scale is viewed as essential to staying ahead of global competitors.

HSBC’s Role and the Orion Platform

HSBC will deliver the pilot through its digital assets platform, HSBC Orion.

The bank has already used Orion to issue digital bonds in other markets, giving it practical experience in tokenised securities and blockchain-based issuance.

Patrick George, Global Head of Markets & Securities Services at HSBC, described the appointment as an opportunity to support both gilt market development and broader economic growth.

The bank sees the project as a continuation of its work in digital assets and market innovation.

By choosing a major global bank with an established digital platform, the Treasury appears to be signalling that this pilot is meant to be credible, scalable, and internationally competitive.

Legal Framework Backed by Ashurst

Alongside HSBC, the government has appointed international law firm Ashurst LLP to provide legal support for the DIGIT pilot.

Its digital assets team will help structure the transaction and navigate regulatory considerations.

Digital sovereign debt issuance raises complex legal questions, from token ownership rights to settlement finality and regulatory compliance.

Ashurst’s involvement suggests that the government is taking a careful, structured approach rather than rushing a purely technological demonstration.

Etay Katz, Head of Digital Assets at Ashurst, described the transaction as a landmark step for UK capital markets, underscoring the significance of the initiative.

The Bigger Picture in Global Finance

Around the world, governments and central banks are exploring tokenised bonds, digital securities, and even central bank digital currencies.

The European Investment Bank has issued blockchain-based bonds.

Singapore and Hong Kong have run similar pilots.

For the UK, DIGIT represents both a defensive and offensive move: defensive in ensuring London does not fall behind other financial hubs, and offensive in trying to shape the standards and infrastructure of digital capital markets.

The Digital Securities Sandbox, which provides a controlled regulatory environment for testing innovations, is central to this effort.

It allows new models to operate with regulatory flexibility while still maintaining oversight.

What’s Next?

The focus now shifts from procurement to execution.

HSBC and the Treasury will work together to finalise the technical build and operational framework for the pilot issuance.

Additional suppliers are being engaged to ensure accessibility and support for secondary market development.

Market participants will be watching closely to see how the issuance performs, how smoothly on-chain settlement operates, and whether liquidity develops in any secondary trading environment.

If successful, the pilot could pave the way for broader use of distributed ledger technology in UK sovereign debt markets.

It may also influence how corporate bonds and other financial instruments are structured in the future.

While DIGIT is short-dated and limited in scope, its implications could be long term.

Summary

The UK government has appointed HSBC as the platform provider for the Digital Gilt Instrument pilot after a competitive tender process launched in October 2025.

The pilot, part of the Wholesale Financial Markets Digital Strategy, will test how distributed ledger technology can be applied to sovereign debt issuance.

HSBC will use its Orion digital assets platform, while Ashurst LLP has been appointed to provide legal services.

DIGIT will be digitally native, short-dated, issued within the Digital Securities Sandbox, and settled on-chain.