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The UK government announced a pilot program on November 14 to issue a Digital Gilt Instrument (DIGIT) using blockchain technology, aiming to modernize public finance. Chancellor of the Exchequer Rachel Reeves unveiled the initiative during her Mansion House speech, presenting it as part of efforts to enhance the UK’s status as a global financial hub.
The pilot will test the use of distributed ledger technology (DLT) in issuing digital bonds comparable to traditional gilts. It will be conducted within the Digital Securities Sandbox (DSS), a regulatory environment launched in September 2024 under the supervision of the Bank of England and the Financial Conduct Authority (FCA), enabling the secure testing of blockchain-based financial innovations.
The program, separate from the Debt Management Office's operations, is designed to avoid disrupting traditional debt issuance activities. Industry consultations are planned for early 2025 to refine the framework and assess the project’s scalability.
