Britain is positioning itself to become the first G7 nation to issue sovereign debt on blockchain, appointing banking giant HSBC and law firm Ashurst to lead a digital public debt trial planned for this year, according to the Financial Times.
The Treasury’s selection of the two companies aims to quell growing criticism that the UK has been dragging its feet on tokenized government bonds. While Chancellor Rachel Reeves unveiled the pilot plan in late 2024, other jurisdictions, including Hong Kong, have already crossed the finish line with their own digital sovereign issuances.
The pilot aims to reduce settlement time and operating costs for market participants. The experiment will take place within the Bank of England’s “digital sandbox”, a controlled environment where financial innovations can operate under relaxed regulatory restrictions.
HSBC is experienced in digital debt offerings, having orchestrated more than $3.5 billion in digital bond issuances through its proprietary Orion blockchain, including Hong Kong’s $1.3 billion green bond last year, one of the largest sales of tokenized debt globally.
On Wednesday, Hong Kong Finance Secretary Paul Chan Mo-po said the multi-currency offering helped boost product liquidity.
“We will regulate the issuance of tokenized green bonds,” he said at CoinDesk’s Consensus Hong Kong conference, which could support greater adoption.
