The UK Treasury is piloting the issuance of digital government bonds (DIGIT) through HSBC Orion.

HSBC Orion issues $3.5 billion in digital bonds through short-term on-chain gilt issuance based on DIGIT and DSS.

The UK Treasury announced on the 13th that it will proceed with a pilot issuance of digital government bonds using HSBC's tokenization platform. HM Treasury appointed HSBC Orion as the platform provider for the DIGIT pilot, which will test the issuance of blockchain-based sovereign bonds.

DIGIT is a structure for issuing and operating digitally native short-term government bonds within the Digital Securities Sandbox (DSS). The DIGIT pilot operates separately from the existing UK government bond issuance program and will develop on-chain settlement and secondary market infrastructure. The UK Treasury stated that its goal is to leverage blockchain technology to increase the efficiency of the issuance process, reduce costs, and enhance security.

Lucy Rigby, the UK Treasury's economic secretary, announced the move on the 13th, stating that it aims to place the UK at the center of global capital market innovation. She stated that the UK will leverage distributed ledger technology (DLT) to attract investment and modernize financial markets.

Since its launch in 2023, HSBC Orion has facilitated the issuance of $3.5 billion (KRW 5.05435 trillion) worth of digitally native bonds globally. HSBC Orion handled the European Investment Bank's digital sterling bond and the Hong Kong government's $1.3 billion (KRW 1.8773 trillion) multi-currency bond issuance. Patrick George, HSBC's Head of Global Markets and Securities Services, noted that the UK, the world's sixth-largest economy, is a key market.

The UK government has appointed Ashurst as legal advisor to the DIGIT pilot. Itai Katz, Ashurst's head of digital assets, said the firm will support the transformation of the UK's capital markets.

Reporter Jeong Ha-yeon yomwork8824@blockstreet.co.kr