- HM Treasury released a digital strategy for wholesale markets, focusing on new uses for decentralized technology.
- The updated plan for the UK’s digital bond project, known as DIGIT, now includes features like on-chain settlement and smart contract support.
- The government aims to connect digital bond trading to both blockchain systems and traditional financial market infrastructure.
- The strategy signals the UK’s openness to models that replace central authorities with decentralized solutions across market operations.
- A new Digital Markets Champion will coordinate efforts in digital finance, including AI, automation, and distributed ledger technology.
HM Treasury announced its new digital strategy for wholesale financial markets on Tuesday. The plan includes adopting decentralized technologies and details updates to the government’s digital bond pilot, known as DIGIT.
The strategy outlines the government’s intention to use distributed ledger technology (DLT), which is a type of shared digital record system, to issue digital bonds on the DIGIT platform. DIGIT will operate separately from the main government debt program. New details include support for on-chain settlement—meaning transactions settle directly on the blockchain—and the use of smart contracts for over-the-counter trading. The plan aims to link digital bond infrastructure with existing systems used by major financial institutions.
According to HM Treasury, some DLT platforms already connect with central securities depositories (CSDs)—institutions that hold financial securities and ensure their safe transfer. SIX Digital Exchange and HSBC’s Orion system in Hong Kong are among the first to operate across both blockchain and traditional platforms. Euroclear has also linked its D-FMI DLT platform to its main CSD.
The government will work with the financial industry to develop features such as collateral mobility, which makes it easier to use digital assets for borrowing, and to improve secondary markets, where clients trade previously issued bonds.
DIGIT is one part of a broader plan to support DLT in wholesale finance. The government wants to move from small tests of tokenized assets—assets that exist in digital form on blockchains—to wider use and greater scale. The new policy also calls for updated rules to encourage broader industry use and allow for new technology models in payment, trading, clearing, settlement, and reporting. The plans extend to the Digital Securities Sandbox, which may include stablecoins and tokenized deposits for transaction settlement.
A statement in the policy notes, “The UK should be open to completely new models across the various wholesale market activities, including payments, trading, clearing, settlement and reporting. It should be open to different technological solutions, including solutions that decentralise functions currently performed by centralised entities.”
To advance these changes, HM Treasury will appoint a Digital Markets Champion to lead coordination between the government and private sector. The role will focus on efforts across Artificial Intelligence, automation, and DLT initiatives.
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