UK tokenization plan targets $44B annual boost with 2027 digital gilt

The UK could add £33 billion ($44 billion) to annual economic output by 2035 through tokenized financial markets, a government-backed task force report said, calling for the first digital gilt by early 2027.

"The task now is to move from pilots to scale and from ambition to action," Chris Woolard, Wholesale Digital Markets Champion at HM Treasury, said in the report published July 13.

The roadmap, developed with 54 firms including BlackRock, Goldman Sachs, JPMorgan, HSBC, Coinbase and Ripple, sets a 12-month plan to test tokenized repurchase agreements — where securities serve as collateral for cash borrowing — and calls for the UK's first digital gilt issuance by the first quarter of 2027.

The report urges the Bank of England to accept digital gilts as central bank collateral, arguing tokenized securities have limited value unless they can be traded or used to raise cash. Nine action groups will work on end-to-end technology use cases, with live testing of tokenized repo transactions targeted for spring 2027.

The global market for tokenized real-world assets could reach $88 trillion by 2035, according to the report, and the UK aims to capture a meaningful share. The government estimates the shift could generate up to £14 billion in additional annual tax revenue by that year.

Ripple, which joined the task force alongside Wall Street institutions, said on-chain financial instruments are already proving superior to traditional systems. "Onchain funds, bonds and repo aren't experiments," the company said. The blockchain payments firm is expected to contribute its international technology expertise to help handle institutional volumes.

The digital gilt itself is not a new proposal. The UK first announced the Digital Gilt Instrument pilot in November 2024, followed by a July 2025 update outlining plans for onchain settlement and secondary-market development. In February, the government appointed HSBC's Orion platform to support the pilot. The new report adds a firm timetable and expands the instrument's intended role to include live secondary-market trading and eligibility as central bank collateral.

The UK already has blockchain-based wholesale payment infrastructure to support such markets. London-based Fnality launched a sterling-denominated payment system tied to central bank reserves in September 2025, designed to support real-time repo, tokenized securities settlement and cross-currency payments.

The Financial Conduct Authority and Bank of England are also working with 16 firms in the Digital Securities Sandbox, covering live issuance and settlement of tokenized bonds, equities and fund units. The next stage, regulators have said, should move activity from pilots toward production. However, firms still need clear rules on custody, capital treatment, legal ownership and settlement money.

Industry feedback on the first stage of the reform will be collected until Sept. 4, 2026, after which the project moves into practical implementation.

This article is for informational purposes only and does not constitute investment advice.