The UK government is accelerating its pilot to test distributed ledger technology (DLT) in sovereign debt issuance. On 18 March, Chancellor of the Exchequer Rachel Reeves met with fintech executives to finalise the next steps for the Digital Gilt Instrument (DIGIT) issuance, reports Regulation Tomorrow. HM Treasury (HMT) and the UK Debt Management Office (DMO) have now launched the procurement process, publishing key details and engagement questions.
The pilot was first announced at Mansion House in November 2024, followed by a written statement to Parliament. Now, HMT and the DMO have begun a Preliminary Market Engagement Exercise through the government’s contract finder service, aiming to gather input from market participants on the potential structure and feasibility of DIGIT.
DIGIT
The pilot will introduce a new, digitally native UK government debt instrument held on a DLT platform. It will be issued within the Digital Securities Sandbox (DSS), requiring suppliers to obtain necessary regulatory approvals from the Bank of England and the Financial Conduct Authority. The instrument will be short-dated and separate from standard government debt issuance, serving as an experimental project. HMT has confirmed that unbacked cryptocurrencies and stablecoins will not be included in the payment process.
Industry consultation
HMT and the DMO are seeking feedback from financial institutions and technology providers to assess market readiness and investor expectations. The consultation will explore technological options, required services, investor preferences, and the broader potential for DLT adoption in UK capital markets. Areas of focus include platform design, data security, and past experience with similar projects.
Market participants have until 13 April to respond to engagement questions. Their input will inform the government’s approach to the procurement process, including the development of a statement of requirements for tendering. A formal tender notice is expected in late spring 2025, with supplier selection anticipated by late summer.
