The UK government has selected HSBC for its Digital Gilt Instrument (DIGIT) pilot program. The selection was made following a competitive review process. The UK government published its invitation to tender in October of last year.
Lucy Rigby KC MP, Economic Secretary to the Treasury, said they aim to attract investment in the UK and they are launching DIGIT to understand how the UK can benefit from the technology while driving efficiency and reducing costs for firms.
“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.”
HSBC already has a digital asset platform, HSBC Orion.
HM Treasury explains that the pilot aims to enable the government to explore how blockchain technology can be used to issue sovereign debt and to boost UK-based DLT adoption and infrastructure.
DIGIT will be digitally native, short-dated, issued on a platform operating within the Digital Securities Sandbox (DSS), delivering on-chain settlement and independent of the main debt management programme.
Richard Baker, CEO and Founder of Tokenovate, said the move from concept to procurement underlines the UK’s ambition to lead next-generation financial services.
“As the programme develops, we’d strongly encourage consideration of the FINOS Common Domain Model (CDM) as the canonical, lifecycle-wide standard for a digital gilt. Legal certainty, interoperability, and programmable settlement from issuance through maturity will be critical to delivering meaningful market impact. Otherwise, there’s a risk this becomes just ‘a bond on blockchain’, rather than a bond that works seamlessly across existing market infrastructure and participants.”