Catenaa, Wednesday, November 20, 2024 – The UK government has announced a pilot program to issue Digital Gilt Instruments (DIGIT) leveraging distributed ledger technology (DLT).
Chancellor of the Exchequer Rachel Reeves introduced the initiative during her Mansion House speech, calling it a step toward modernizing the country’s financial markets as part of the Financial Services Growth and Competitiveness Strategy.
DIGIT aims to tokenize UK government bonds to enhance market efficiency. The pilot will launch with a phased approach: a short-dated Treasury bill will be tested with select participants, followed by medium-term gilts with expanded functionality.
The final stage will see gilts fully traded and settled on-chain within 18 months.
The initiative builds on previous efforts by the Conservative government and complements the Digital Securities Sandbox, which facilitates regulatory testing of tokenization projects.
Experts highlight digital gilts’ potential to improve processes like repurchase agreements (repos) through instant settlement. Infrastructure such as Fnality, a blockchain-based settlement network supported by the Bank of England, positions the UK for leadership in tokenized financial systems.
