Michaela
The UK government has begun preparations to trial digital gilts, known as DIGIT, using distributed ledger technology (DLT).
According to a March 18 Bloomberg report, a newly released policy paper outlines the initiative, which aims to modernize debt management and enhance market accessibility. Financial firms such as Revolut, Stripe, Zilch, and Wise have been invited to participate in the trial, following a meeting led by Chancellor of the Exchequer Rachel Reeves. The project marks a significant step in the UK’s exploration of blockchain technology in the financial sector.
The UK Treasury confirmed that its planned digital gilts system will function independently from the country’s existing debt issuance mechanisms. According to the policy document, integrating DLT into government bond issuance could enhance efficiency, boost liquidity, and widen investor participation.
Reeves stated that the introduction of DIGIT is expected to modernize the UK’s capital markets and support economic growth. She emphasized that the initiative positions the country at the forefront of digital innovation, reinforcing its leadership in financial technology and market development.
The UK aims to issue digital gilts within the next two years, with ongoing consultations involving industry stakeholders. These digital bonds, classified as transferable securities, will be managed entirely on a distributed ledger platform.
Gilts, the UK’s counterpart to U.S. Treasury bonds, are government-issued securities known for their stability and reliable returns. These low-risk investments provide regular interest payments, known as coupons, making them a favored option for investors seeking steady income. Additionally, gilts offer a tax advantage, as any profits generated are exempt from capital gains tax (CGT).
The UK’s move to digitize government bonds aligns with a growing global shift toward real-world asset (RWA) tokenization. While the concept is not new, the country is positioning itself within an evolving market that has drawn interest from major financial players like SWIFT and BlackRock. With the potential to reach trillions in value, tokenized bonds are becoming a key focus for firms integrating blockchain technology into traditional financial systems.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
