In March 2025 the government announced the start of its procurement process for the Digital Gilt Instrument (DIGIT) Pilot.  This first stage of the procurement process was the Preliminary Market Engagement Notice (PMEN), which sought views from potential suppliers and the wider financial services sector on the delivery of DIGIT. This process closed in April, and the government has been carefully reviewing responses to inform its next steps.

As was set out in the PMEN, the pilot aims to:

• enable the government to explore how distributed ledger technology (DLT) can be applied across the lifecycle of the UK sovereign debt issuance process.
• catalyse the development of UK based DLT infrastructure and the adoption of DLT in UK financial markets.

The PMEN outlined an initial set of design decisions that had been taken to meet these aims, including that DIGIT will be digitally native, short-dated, issued on a platform operating within the Digital Securities Sandbox (DSS) and that the issuance will be separate from the government’s debt issuance programme.

Taking into account feedback from the PMEN responses, the government can today announce a further set of features that aim to be tested as part of the pilot:

• Delivering on-chain settlement. In line with the objective to test the full lifecycle of the UK sovereign debt issuance process, the government will prioritise solutions that allow DIGIT to be settled on DLT. This includes the cash leg of DIGIT transactions.
• Enabling settlement of over-the-counter trades. The ability to trade DIGIT between counterparties on a DLT platform is important for establishing an active market. This includes testing functionality of DLT compared to standard fixed income markets, such as the role smart contracts can play in over-the-counter trades.
• Supporting interoperability. Responses highlighted that a key barrier to adoption of DLT is that it could lead to a fragmented market. The government will look to work with industry, platform providers and existing market infrastructure providers to foster interoperability in supporting access to DIGIT from investors operating in both traditional and DLT markets.
• Deliver greater transparency. DLT platforms have the capability to provide greater visibility of securities ownership and other potential benefits. This is an important area where DLT can go beyond what is possible on existing infrastructure making it important to test how these benefits can be realised.

The government also wants to work with the financial services sector to encourage ongoing development of additional DIGIT features and functionality. This includes supporting solutions that enable collateral mobility; examining the case for listings on DLT; and the development of secondary markets.

It is the government’s intention to engage with the Digital Markets Champion, a new role being created under the Wholesale Financial Markets Digital Strategy being published today, to develop a cross-sectoral strategy for delivering these features.^{[footnote 1]} The government will appoint industry leads to these roles this Autumn.

The government intends to set out further details on the pilot as a part of the next phase of the procurement process which will be published over the summer with a view to appointing suppliers later this year.