6 banks picked to sell the UK’s first digital government bond
Key Points
- Six banks will sell the UK's first digital government bond, DIGIT
- Barclays, HSBC, Lloyds, Morgan Stanley, NatWest and RBC Capital Markets were chosen
- The banks can now begin talks with potential investors
- The Treasury plans to issue the blockchain-based bond by early 2027
- HSBC already supplies the technology platform behind the pilot
The UK government has appointed Barclays, HSBC, Lloyds, Morgan Stanley, NatWest and RBC Capital Markets to sell its first digital gilt.
City minister Lucy Rigby, the Economic Secretary to the Treasury, named the six banks during a keynote speech at Digital Assets Week on Tuesday (6 October), HM Treasury said.
The banks will act as joint lead managers for the Digital Gilt Instrument (DIGIT), a pilot government bond that runs on distributed ledger technology (DLT), the system behind blockchain.
A gilt is a bond the UK government sells to investors to borrow money, paying them interest in return.
The six banks will underwrite the bond, hold talks with potential investors and distribute DIGIT to buyers on issuance day.
Their appointment completes the procurement process, which means engagement with investors can now begin.
The Treasury said it chose the banks through a competitive process that assessed suppliers against transparent and objective criteria.
“Digitalisation is central to ensuring that the UK can be a global hub for digital assets and the government’s commitment to the issuance of a digital gilt is a core part of this agenda,” said Rigby.
“The appointment of Lead Managers marks an important step as we work towards issuance early next year,” she added.
The Treasury plans to issue DIGIT by the first quarter of 2027.
The bond will be digitally native and short-term, and it will sit outside the government’s main borrowing programme.
It will run on a platform inside the Digital Securities Sandbox, a testing regime overseen by the Bank of England and the Financial Conduct Authority.
Trades in DIGIT will settle directly on the ledger rather than through traditional settlement systems.
The Treasury said the pilot aims to:
- Explore how DLT could work across the way the UK issues and manages government debt
- Encourage the development of UK-based DLT infrastructure and its wider use across UK financial markets
The announcement follows the government’s appointment of HSBC as the pilot’s DLT supplier in February.
In July, HSBC and the London Stock Exchange Group (LSEG) signed a memorandum of understanding to connect their systems for holding and settling digital securities.
The Treasury said DIGIT forms part of wider plans to digitalise wholesale financial markets and keep the UK competitive as other financial hubs explore the same technology.
