On 15 July 2025, HM Treasury issued a Policy Paper providing a Digital Gilt Instrument (DIGIT) pilot update.
The DIGIT pilot aims to:
- Enable the government to explore how distributed ledger technology (DLT) can be applied across the lifecycle of the UK sovereign debt issuance process.
- Catalyse the development of UK based DLT infrastructure and the adoption of DLT in UK financial markets.
In the update the government announces a further set of features that aim to be tested as part of the DIGIT pilot:
- Delivering on-chain settlement. In line with the objective to test the full lifecycle of the UK sovereign debt issuance process, the government will prioritise solutions that allow DIGIT to be settled on DLT. This includes the cash leg of DIGIT transactions.
- Enabling settlement of over-the-counter trades. The ability to trade DIGIT between counterparties on a DLT platform is important for establishing an active market. This includes testing functionality of DLT compared to standard fixed income markets, such as the role smart contracts can play in over-the-counter trades.
- Supporting interoperability. Responses highlighted that a key barrier to adoption of DLT is that it could lead to a fragmented market. The government will look to work with industry, platform providers and existing market infrastructure providers to foster interoperability in supporting access to DIGIT from investors operating in both traditional and DLT markets.
- Deliver greater transparency. DLT platforms have the capability to provide greater visibility of securities ownership and other potential benefits. This is an important area where DLT can go beyond what is possible on existing infrastructure making it important to test how these benefits can be realised.