Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps her Department is taking with the Financial Conduct Authority to help ensure that digital sovereign instruments issued by the Digital Securities Sandbox are fully interoperable with existing (a) financial infrastructure and (b) secondary markets.

The Government is taking forward its digital gilt instrument (DIGIT) pilot which will be issued onto a digital securities platform within the Digital Securities Sandbox (DSS). With this pilot, the Government is seeking to explore how distributed ledger technology (DLT) can be applied across the lifecycle of the debt issuance process and catalyse the development of DLT in UK financial markets.

In April the government issued a market engagement notice, to understand both the current landscape of services available or in development in the UK and what potential investors want to see from a DIGIT issuance. This included questions aimed at understanding how important both secondary market trading and interoperability with existing market infrastructure were for the sector. The department is currently analysing responses ahead of launching an invitation to tender in the coming months.

The department is working closely with regulators, including the FCA, to ensure that DIGIT is successful in meeting its objective to catalyse the growth and adoption of DLT in UK financial markets.