UK Appoints HSBC for Blockchain-Based Digital Gilt Pilot

Key Insights

• UK Treasury chose HSBC Orion to test blockchain issuance and settlement for digital gilts in a controlled environment.

• The DIGIT pilot targets near real-time settlement and lower operational costs across the UK sovereign bond market.

• Parallel regulatory scrutiny continues as UK authorities monitor crypto-linked ETN access for retail investors.

UK Treasury has announced that HSBC is the platform provider to its Digital Gilt Instrument (DIGIT) pilot. The ruling upholds the proposal of the government to modernize the issue of sovereign debt issuance through distributed-ledger technology. Officials confirmed the appointment on February 12, 2026, following a competitive procurement process launched in late 2025.

The pilot will run within a regulated sandbox. It will allow authorities and market participants to test how digital gilts function across issuance, trading, and settlement. Policymakers expect the trial to provide operational evidence before any wider market rollout.

HSBC Orion Selected for DIGIT Pilot

HSBC will deploy its Orion blockchain platform as the core infrastructure for the DIGIT initiative. Orion already supports multiple large-scale digital bond issuances across Europe and Asia. These include sterling-denominated and green bond transactions for public-sector issuers.

The Treasury intends to make gilts digitally native through DIGIT instead of being tokenized replicas. The platform will enable the use of on-chain settlement that can reduce the settlement period of days to minutes. This model could also minimize reconciliation of intermediaries.

The pilot is consistent with the overall capital markets approach of the government. In 2024, Chancellor Rachel Reeves announced an intention to bring about the use of DLT in the UK gilt market. The DIGIT trial will be a pragmatic move in that direction, and existing regulatory control will be maintained.

Market Context and Regulatory Signals

Blockchain-based bond settlement can improve transparency and operational efficiency. Market participants can track ownership changes directly on a shared ledger. This structure may also widen participation by lowering technical barriers for investors and dealers.

The DIGIT announcement follows increased regulatory interest in digital asset exposure. It has been reported that Trading 212 enabled UK retail investors to access crypto-linked exchange-traded notes without appropriate approval. The regulators insist that firms must possess certain authorization to provide such products based on debentures.

In October 2025, the UK regulators removed a ban on retail crypto ETNs that existed since the 19th century. Regulators have since increased the level of supervision to keep the firms accountable to the rules of conduct. Together, these developments show a dual approach: encouraging financial innovation while maintaining strict market controls.