London-headquartered bank HSBC has secured a UK government mandate to act as platform provider for its Digital Gilt Instrument (DIGIT) pilot, moving it closer to testing distributed ledger technology within the UK gilt market.
The Digit pilot, confirmed by HM Treasury, will allow the government to test how DLT can be used in issuing UK sovereign debt, while helping to drive wider DLT infrastructure and adoption across financial markets.
The instrument will be digitally native and short-dated, issued through the Digital Securities Sandbox with on-chain settlement, and will sit outside the government’s core debt management programme.
UK industry welcomes government’s digital gilt pilot
Economic secretary to the treasury, Lucy Rigby KC MP said: “We want to attract investment and make the UK the best place to do business, which is why we are launching Digit to understand how the UK can capitalise on this technology, deliver efficiencies and reduce costs for firms.” Rigby added, “This is exactly the kind of financial innovation we need to keep the UK at the forefront of global capital markets and I’m looking forward to working with HSBC and other parties to deliver DIGIT.”
The government’s tender invite was issued in October last year, with HSBC’s proposal finally selected according to the evaluation criteria.
Patrick George, global head of markets and securities services at HSBC, said: “HSBC is delighted to be supporting the continued development of the gilt market, market innovation, and the growth of the broader UK economy. We are very pleased that HM Treasury has chosen our market-leading digital assets platform, HSBC Orion, for the DIGIT pilot issuance.”
The UK government also confirmed that Ashurst LLP will provide legal support for the pilot. Etay Katz, head of digital assets at Ashurst, said: “We are proud to have been appointed by HM Treasury to advise on this landmark transaction. Our team brings deep expertise in digital assets transactions, and we look forward to working with HSBC and supporting the government as it takes this transformative step for UK capital markets.”
