The U.K. plans to issue a digital sovereign bond by early 2027, becoming the first of the seven leading industrialized nations to place government debt on a distributed-ledger infrastructure.

Chancellor Rachel Reeves announced the timeline in her annual Mansion House speech to industry leaders. The government plans further issuance after the initial sale.

The Digital Gilt Instrument, known as DIGIT, will be a sterling-denominated government security issued on HSBC’s Orion platform and will operate inside the Bank of England and Financial Conduct Authority’s Digital Securities Sandbox.

The Treasury announced the pilot in 2024 to test whether blockchain infrastructure could reduce settlement times, reconciliation work and operating costs. HSBC was appointed to run the platform in February, having issued over $3.5 billion in digital bonds through its Orion blockchain.

Speaking at the same event, Bank of England Governor Andrew Bailey said the central bank will work to make DIGIT eligible as collateral in its market operations. That could support tokenized repo and allow banks to use the bond in central bank funding transactions.

The Treasury has not disclosed the bond’s size, maturity, coupon, investor eligibility or settlement asset. The initial sale will sit outside the government’s conventional gilt-financing program.