UK Treasury Picks HSBC’s Blockchain Platform to Run Digital Gilt Pilot — A Watershed Moment for Tokenized Government Debt

Forget dusty ledgers and slow settlements. The UK Treasury just placed a massive bet on blockchain's future by selecting HSBC's digital asset platform to pilot its digital gilts. This isn't a side experiment—it's the government putting its sovereign debt on-chain.

The Mechanics of Modernization

The move bypasses traditional infrastructure, aiming to cut settlement times from days to minutes. It slashes counterparty risk and operational friction in a market where every basis point counts. Think instant issuance, programmable coupons, and a 24/7 market—all running on rails built for the digital age.

Why This Pilot Changes Everything

When a G7 treasury adopts blockchain for its core debt instruments, it sends a signal. It validates the technology for institutional heavyweights still sitting on the sidelines. This pilot could become the blueprint, proving that sovereign debt—the bedrock of global finance—can be digitized without compromising security or scale.

The finance world loves a good pilot—it’s the perfect way to look innovative while keeping the real money in the same old, fee-generating systems. But this time, the stakes are too high to ignore. If it works, the entire architecture of capital markets starts to look obsolete. The era of tokenized everything just got its most credible backer yet.

Coombes says the digital gilt plan will show the UK is ready to lead in digital finance

During her Mansion House speech in November 2024, Reeves set out plans for a digital gilt trial, projecting the UK could begin issuing digital gilts within the next two years.

She subsequently sought applications to lead the project in October 2025. However, the nation is still behind jurisdictions such as Hong Kong and Luxembourg, both of which have completed digital sovereign offerings, adding to concerns about delays.

Mike Coombes, chief corporate affairs officer at technology provider PrimaryBid, argued that the convergence of digital and traditional finance is in motion, cautioning that the UK could either take a leadership role or end up playing catch-up. He added that through a digital gilt, the UK could codify the legal treatment of digital assets and clearly signal its plan to take an active role in digital finance.

Last month, Ousmène Jacques Mandeng, LSE visiting fellow involved in the digital gilt tender, asserted that the UK must MOVE forward with a decision on the tender and its subsequent development.

Speaking on the digital gilt program, Lucy Rigby, City minister, also said: “This is exactly the kind of financial innovation we need to keep the UK at the forefront of global capital markets. We want to attract investment and make the UK the best place to do business.” 

She further noted that the digital gilt initiative WOULD demonstrate how the UK can use this technology to streamline processes and reduce costs for firms.

Allan says they must enact proper legislation for the digital gilts program

However, John Allan, head of innovation and operations at the Investment Association, noted that while digital gilts’ appeal lies in their immediate settlement, they would still need appropriate legislation and tax treatment to become a regular feature of UK debt markets.

He stated, “We’ve been following the digital gilt project very closely since 2023. It’s certainly been a long time coming, and we are very keen that it moves ahead and moves into a longer programme to become the way the government issues its debt.” 

So far through its Orion blockchain system, HSBC has managed digital bonds worth more than $3.5 billion for clients, including countries, central banks, and companies. In 2025, it also oversaw a $1.3 billion green bond issuance by Hong Kong, a record-setting digital bond transaction.

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