Chancellor Rachel Reeves has launched the procurement process for Digital Gilt Instruments (DIGIT) today, meeting with fintech CEOs at No. 11 this morning to test demand for these tokenised assets.
The Treasury said issuing digital gilts – which was first announced in her Mansion House speech in November – will “modernise financial markets”.
Former economic secretary Tulip Siddiq said at the time that perusing tokenised gilts will boost demand by “making transactions more efficient” and offering “greater resilience and transparency”.
By testing the water with fintech leaders today, the Treasury said these early moves will “allow the Government to understand the current landscape” and “gain insight into what potential investors want to see from a DIGIT issuance to help inform HMT’s commercial strategy”.
Reeves added: “The UK is leading the way on digital innovation, and the creation of DIGIT will help to transform our world-leading capital markets sector and drive economic growth.”
The UK will be the first G7 country to issue digital gilts if the plan to launch them within the next two years goes ahead. Diego Ballon Ossio, partner at Clifford Chance, said it would be a “landmark achievement” for the UK on the global stage.
“This announcement is welcome news for the industry,” he added. “We have seen significant client interest in the DIGIT initiative since its inception, from domestic and international clients, and it is encouraging to see more details being released. This move underscores the UK’s ambition to continue leading the development of global financial markets.
“However, it is crucial to ensure that the project enables broad participation, allowing the wider ecosystem to trial and benefit from this innovative approach.”