UK’s Revolution: City Minister Spotlights Digital Innovation at Government’s Core

The world of finance is changing fast, and now the UK government is jumping in with both feet. In a recent keynote speech, the UK’s City minister called a new project a game-changer. It’s “bringing digital innovation to the heart of government,” she said. This move uses blockchain tech to issue a government bond, known as a ‘digital gilt instrument’ or DIGIT.

What is a Digital Gilt or ?

Let’s break it down simply. A traditional gilt is like an IOU from the UK government. It’s a promise to pay back money in British pounds, traded on the London Stock Exchange. The UK Debt Management Office has issued these since 1998 for HM Treasury.

Now, DIGIT is different. It’s a built on distributed ledger technology (DLT), which is the tech behind blockchain. Think of blockchain as a super-secure digital notebook that no one person controls. Everyone can see the entries, but no one can change them without agreement.

DIGIT will launch on a special platform inside the Digital Securities Sandbox (DSS). This sandbox opened in 2024 by the Bank of England and Financial Conduct Authority. It’s a safe testing ground for new tech, watched closely by regulators.

City Minister’s Big Vision

Lucy Rigby, the City minister and economic secretary to the Treasury, shared this excitement at the London Tokenisation Summit. Speaking remotely from China, she said:

“We’re actively bringing digital innovation to the heart of government by using the sandbox for the launch of DIGIT. We intend to issue a digitally native government bond to deliver two key aims: exploring how DLT can be applied to our debt issuance process and catalysing the development of digital markets, putting the UK firmly at the centre of global markets.”

She stressed real teamwork: “When I talk about collaboration between industry and government, I don’t mean government just sitting back and watching while industry does all of the work.”

Rigby also noted that tokenisation and digital assets are going mainstream. Tokenisation means turning real-world assets, like bonds, into digital tokens on blockchain. This makes trading faster, cheaper, and more open.

Why Now? The Road to DIGIT

Plans for this started 18 months ago under the previous government. The Spring Budget 2024 promised to explore DLT for sovereign debt. After the election, Chancellor Rachel Reeves and then-Economic Secretary Tulip Siddiq confirmed it in late 2024.

In March 2025, HM Treasury and the Debt Management Office ran a market engagement exercise. They asked industry for ideas on tech options and how to design DIGIT to boost DLT in UK markets. A pilot update in July 2025 listed key tests: on-chain settlement, interoperability, over-the-counter trading, collateral mobility, and secondary market trading.

Procurement is done, but the winner isn’t announced yet. More news is coming soon, Rigby promised.

Standing Out from the Crowd

The UK isn’t first, but it aims to lead. Others like Hong Kong, Philippines, Thailand, Lugano in Switzerland, and Quincy in the US have tried digital bonds. The World Bank launched bond-i in 2018, the first full DLT bond. The European Investment Bank followed.

UK Finance, a key industry group, pushed for this in reports like ‘Digital Gilt Roadmap’ (2024) and ‘Unlocking the Power of Securities Tokenisation’ (2023). They suggest two paths: slow ‘Evolutionary’ build-up or fast ‘Big Bang’ launch. Either way, it promises efficiency and wider participation.

• On-chain settlement: Trades settle instantly on blockchain, no middlemen delays.
• Interoperability: Works with different systems.
• OTC trading: Direct deals between parties.
• Collateral mobility: Easy use of bonds as loan security.
• Secondary trading: Smooth resale markets.

Big Wins for UK Finance and Crypto

This could supercharge UK markets. It tests DLT in real government debt, building trust. A ‘digital markets champion’ role, announced in 2025, will coordinate private sector efforts.

For crypto fans, it’s huge. Governments using blockchain shows it’s not just for Bitcoin. It normalizes DLT, attracts investment, and speeds adoption. UK stays competitive in global digital finance.

Benefits include:

1. Lower costs: Less paperwork, fewer errors.
2. Faster trades: 24/7 markets.
3. More access: Smaller investors join via tokens.
4. Better security: Blockchain’s tamper-proof records.
5. Innovation boost: Spurs new fintech apps.

Challenges Ahead

It’s experimental, so DIGIT sits outside normal gilt operations. Regulators watch closely in the sandbox. Tech hurdles like scaling blockchain for big trades exist. But with industry input, solutions are coming.

Global race heats up. If UK nails this, it could lead in tokenised assets, worth trillions per some estimates.

What’s Next for ?

Watch for DIGIT issuance details. Success here paves way for more digital gilts. It aligns with UK’s Wholesale Financial Markets Digital Strategy.

This is more than a bond—it’s a signal. Governments embracing blockchain means mainstream finance is ready. For blockchain and crypto, it’s a massive vote of confidence.

Stay tuned as UK pushes digital frontiers. The revolution is here, starting at government’s core.

Key Takeaways

• UK’s DIGIT: First digital native government bond on blockchain.
• Launches in Digital Securities Sandbox for safe testing.
• Aims: Test DLT, grow digital markets.
• Minister Rigby: Active government role in innovation.
• Global context: Builds on World Bank, others.

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