UK Chancellor, Rachel Reeves, has invited financial services companies to bid for the first round of contracts relating to the creation and issuance of the UK’s first digital gilts.
On Tuesday (18 March), the UK government released initial details of the procurement process for the Digital Gilt Instrument issuance programme – or “DIGIT”.
The pilot is seeking to help the government and policymakers explore how digital ledger technology (DLT) can be applied to the UK sovereign debt issuance process.
It is hoped the pilot will successfully catalyse the development of UK based DLT infrastructure and the adoption of DLT across UK financial markets.
In a statement, Rachel Reeves, UK Chancellor of the Exchequer said: “the UK is leading the way on digital innovation, and the creation of DIGIT will help to transform our world-leading capital markets sector and drive economic growth.”
The pilot’s initial design features have been set and include a requirement for DIGIT to be digitally native, short-dated, and issued on a platform operating within the Digital Securities Sandbox (DSS).
The pilot will operate independently of the government’s main debt management programme.
Interested parties have until 13 April 2025 to respond to the invitation for expressions of interest (which can be found here) or to seek further clarification.
In November, the government signalled its intention to test new technologies for sovereign debt issuance, with a view to gain a better understanding of the benefits.
“This pilot aims to issue a digital bond with similar features to a conventional gilt,” it said.
“It will utilise the Digital Securities Sandbox (DSS), which opened for applications in September 2024. The DSS provides a regulatory environment through which firms can use DLT to create, trade and administer securities, while being supervised by the Bank of England and the Financial Conduct Authority (FCA).
“It allows market participants to experiment with DLT-based market infrastructures in a controlled and monitored setting, ensuring that any potential risks are managed while fostering innovation.”
