Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what criteria her Department plans to use to assess the effectiveness of the digital gilt instrument pilot.

This pilot would allow us to make more informed decisions on Distributed Ledger Technology’s (DLT) potential future application to wider government debt issuance. Demonstrating feasibility on a government bond issuance will also support the private sector by providing a use case that will assist their own use and investment in the technology. The pilot puts the UK at the forefront of capital markets innovation. This experimental issuance is separate from the government’s normal operations and overall debt issuance programme. The pilot will utilise the Digital Securities Sandbox (DSS), which opened for applications in September 2024. The DSS utilises temporary modifications to legislation to provide an environment where firms can use developing technology, in particular DLT, to create, trade, and manage securities, under the supervision of the Bank of England and the Financial Conduct Authority (FCA). This enables activity to happen in a controlled and monitored setting, ensuring that potential risks are managed while fostering innovation. I set out in a Written Ministerial Statement on 18 November 2024, that the government will engage with the financial sector in the new year to explore what the issuance could look like and the technology options available to facilitate it.