UK names HSBC and Ashurst to run pilot for tokenised government bonds

The Treasury has appointed HSBC and Ashurst to run an operational pilot that will explore issuing UK sovereign debt in tokenised form and how those instruments can interact with central-bank money. The trial will take place within the Bank of England’s regulated testing environment and is timed to coincide with a broader six-month sandbox scheduled to begin in spring 2026, which will convene around 18 market utilities, banks, fintechs and decentralised-technology teams. Beyond proving token issuance, the exercise is explicitly designed to probe linked settlement workflows — delivery‑versus‑payment and payment‑versus‑payment — that connect the Bank’s planned RT2 ledger to external distributed-ledger systems without moving actual customer funds. The selection of a global bank with previous tokenised-debt experience together with a major law firm signals an emphasis on execution risk management, legal clarity over ownership and transfer, and on-ramps to existing market plumbing. Technical aims include demonstrating deterministic cross‑platform settlement, surfacing interoperability barriers such as messaging standards and timing constraints, and testing failure-recovery logic and operational playbooks. The pilot will also prototype how margining, redemption and custodial arrangements work when tokens must interact with central bank finality rules. Outcomes are intended to feed directly into design decisions for RTGS synchronization features and broader integration choices for the UK market. If the experiment shows reliable settlement patterns and manageable operational demands, it could justify phased rollouts or follow‑on pilots that seek cost and speed benefits for dealers, custodians and investors. Conversely, evidence of legal ambiguity, resiliency gaps or impractical coordination requirements could restrict future deployments to narrower use cases. The project therefore aims not only to assess ledger capability but to reveal the policy, governance and operational trade‑offs that will determine whether tokenisation can be absorbed into sovereign debt markets at scale.