What happened

A consortium of market infrastructure firms and principal trading houses executed the first cross‑border, same‑day repurchase using digitized U.K. gilts on the Canton Network, settling both cash and securities on a common ledger in near real time. The transaction demonstrated onchain transfer of legal title and programmable enforcement of repo terms via smart contracts.

Participants and mechanics

Major infrastructure and trading names participated — including LSEG, Euroclear, DTCC, Tradeweb, Citadel Securities and Societe Generale — with smart contracts encoding interest and risk features so obligations could be enforced automatically. The pilot also demonstrated a cross‑currency swap where tokenized gilts were exchanged for tokenized deposits denominated in another currency.

Parallel official sandbox and scope

In parallel, the U.K. Treasury has appointed HSBC and law firm Ashurst to run an operational pilot within the Bank of England’s regulated RT2 testing environment. That six‑month sandbox—scheduled to begin in spring 2026 and to convene roughly 18 market utilities, banks, fintechs and distributed‑technology teams—will focus expressly on issuing sovereign debt in tokenised form and on how those tokens interact with central‑bank money.

Crucially, the RT2 exercise is designed to probe linked settlement workflows (delivery‑versus‑payment and payment‑versus‑payment) and resilience, messaging and failure‑recovery playbooks without necessarily moving actual customer funds. Outcomes will feed into RT2 design choices and decisions about how central‑bank finality can be bridged to external distributed ledgers.

Why this matters and how the tracks relate

The Canton demonstration shows that private‑sector led, ledger‑native settlement can execute intraday, cross‑border repo workflows that reduce latency and potentially unlock greater collateral mobility. The U.K. Treasury/BoE sandbox, by contrast, is explicitly testing integration with central‑bank money, legal ownership frameworks and operational safeguards that are prerequisites for wide adoption in sovereign bond markets.

Together the initiatives illustrate two complementary development pathways: market‑led experiments that prove functional onchain settlement and official, controlled pilots that stress legal finality, custodial arrangements and RTGS integration. Scaling tokenized gilts for routine collateral use will require both: operational maturity shown in market tests and legal‑regulatory alignment validated in central‑bank environments.

Operational change and constraints

By placing both legs of the repo on a shared ledger, counterparties can transfer legal title and achieve cash finality in hours or minutes instead of navigating multi‑day settlement windows and batch cutoffs. Project leaders point to current collateral utilization rates near 10–11% — roughly $28 trillion in active collateral at any one time — and argue that onchain rails could raise that usable pool materially.

However, the RT2 pilot underscores that technical capability alone is not sufficient: deterministically reliable cross‑platform settlement, messaging standards, insolvency law, margining rules and custodial models all must be reconciled with central‑bank finality rules before full scale deployment.