British Government Plans Blockchain Gilt Test in Early 2027

The British government plans to test its first blockchain gilt in early 2027 through HSBC and London Stock Exchange Group, but industry experts say the lack of an on-chain cash settlement mechanism remains the biggest obstacle. According to Foresight News, this issue has affected the digital bond sector for nearly seven years. Varun Paul, global head of central banks and financial market infrastructure at Fireblocks, said moving sovereign debt on-chain would fundamentally change capital flows and could unlock tens of billions of dollars in idle liquidity. He noted that average daily trading volume in U.K. gilts exceeds 45 billion pounds. Jannah Patchay, founder of Markets Evolution, said the solution lies in expanding the use of compliant pound stablecoins, but the world’s largest pound stablecoin, TGBP, has a market value of only about 34.2 million dollars. She added that the U.K. crypto regulatory framework will not take effect until October 2027, and current U.K. settlement finality laws do not cover distributed ledgers, creating a legal gap. The U.K. Wholesale Digital Markets report estimated that the global tokenized real-world asset market could reach 88 trillion dollars by 2035 and warned that slow implementation could drive liquidity out of the market.