The UK government has taken another step towards the pilot launch of a Digital Gilt Instrument (DIGIT) by allocating specific Lead Manager roles to Barclays, HSBC, Lloyds, Morgan Stanley, NatWest and RBC Capital Markets.
The roles cover key aspects of preparing and delivering the transaction, from documentation and bookbuilding to investor communications and helping investors access the digital platforms through which DIGIT will be available.
The Bank of England has also confirmed regulatory approval for a link between HSBC and LSEG's Digital Securities Depositories (DSDs). Investors will be able to access DIGIT through either infrastructure, which aims to reduce fragmentation between digital platforms and support wider participation in the pilot. At Mansion House last year, the government committed to ensuring that DIGIT supports interoperability between digital platforms and provides effective investor access. Under the arrangement, HSBC Orion will act as the issuer DSD and LSEG B3 will act as an investor DSD.
Together, the announcements are aimed at giving investors greater certainty ahead of the planned pilot issuance, expected by Q1 2027.
DIGIT is a key part of the government's Wholesale Financial Markets Digital Strategy and will test how distributed ledger technology (DLT) can be used in UK sovereign debt issuance, and support the development and adoption of digital financial infrastructure in the UK. The pilot will:
- enable the government to explore how DLT can be applied to UK sovereign debt issuance processes; and
- support the development of UK-based DLT infrastructure and its adoption across UK financial markets.
DIGIT will be digitally native and short-dated, and will be issued on a platform operating within the Digital Securities Sandbox. It will use on-chain settlement and will sit outside the government's main debt management programme.
