The UK is positioning itself to become the first G7 country to issue sovereign debt on the blockchain, appointing banking giant HSBC and law firm Ashurst to guide a digital gilt trial expected to take place this year, the Financial Times reported.
The Treasury’s selection of the two companies was aimed at quelling growing criticism that the UK has been dragging its feet on tokenizing government bonds. Although UK Chancellor of the Exchequer Rachel Reeves unveiled the pilot scheme in late 2024, other jurisdictions, including Hong Kong, have already crossed the finish line with their own digital sovereign issuances.
The pilot aims to reduce settlement times and operating costs for market participants. The experiment will run within the Bank of England’s “digital sandbox,” a controlled environment where financial innovation can operate under relaxed regulatory restrictions.
HSBC has extensive experience in digital debt issuance, having orchestrated more than $3.5 billion in digital bond issuance via its proprietary Orion blockchain, including a $1.3 billion green bond in Hong Kong last year, one of the largest tokenized debt sales in the world.
On Wednesday, Hong Kong Financial Secretary Paul Chan said the multi-currency issuance would help increase the liquidity of the product.
“We will regulate the issuance of tokenized green bonds,” which could support further adoption, he told CoinDesk’s Consensus Conference in Hong Kong.
