The British Treasury has named six banks to lead its trial of digital bonds.
Billed as a “pilot project,” the issuing of digital versions of the United Kingdom’s government bonds, known as “gilts,” is aimed at modernizing how the country’s capital markets operate.
Among the banks that will run the trial issuance of digital gilts are Barclays (NYSE: $BCS) and HSBC Holdings (NYSE: $HSBC).
U.S. investment bank Morgan Stanley (NYSE: $MS) is also involved in the project.
The digital bond sale is expected to take place by the first quarter of 2027, said the U.K. Treasury in a statement.
Earlier this year, the British government selected HSBC as the supplier of the blockchain platform that will be used to issue, distribute, and settle digital gilts.
The digital gilt bonds used in the trial are being referred to as “DIGIT.”
The U.K. government says that it is exploring how the technology underpinning cryptocurrencies can be used to change the way securities are created and transferred around the world.
The hope is that the tokenization of government debt, or bonds, can make transactions and record-keeping involving such assets faster and cheaper.
The DIGIT bond pilot is part of the U.K.’s broader effort to digitize its financial markets and bolster the country’s competitiveness as new technologies reshape global finance.
“Digitalisation is central to ensuring that the U.K. can be a global hub for digital assets and the government’s commitment to the issuance of a digital gilt is a core part of this agenda,” said the British Treasury in its statement.
HSBC stock has gained 37% over the last 12 months to trade at $97.99 U.S. per share in New York.
