HSBC named investor depository for UK digital gilt pilot

HSBC will act as the investor depository in a UK pilot testing tokenised gilts, taking responsibility for holding investor records and providing custody and safekeeping for the digital securities used in the programme.

The bank will hold the ledger of investor entitlements and manage custody arrangements that connect traditional investors and intermediaries to the pilot’s digital infrastructure. The role is intended to allow institutional investors to take part in a controlled testing environment while existing systems and regulatory safeguards remain in place.

The pilot will test whether tokenised gilts can be issued, settled and held alongside existing market plumbing. HSBC’s tasks will include enabling settlement and ownership transfers within the pilot and ensuring investors’ legal and administrative interests are recorded and maintained according to established practices. Participants will include market infrastructure providers, banks and other institutional investors taking part in trial runs.

Pilot organisers describe the trials as limited in scope. The work will evaluate technical and operational questions such as how investor records are maintained, how transfers reconcile with central securities depositories, and how regulatory and tax reporting for digital instruments can be handled. The investor depository function is central to those tests because it preserves a clear line of ownership and enables reconciliation between new digital records and traditional accounts.

Additional tests will explore how tokenised gilts interact with settlement systems and custody chains. HSBC will record holdings of tokenised securities and process investor instructions within the pilot environment. The programme will also examine operational controls including identity verification, investor onboarding, and procedures for handling corporate events and payments on tokenised instruments.

Organisers say the pilot will monitor how investor rights, transfers and redemption processes are implemented on the digital platform and how those actions are reflected in HSBC’s investor records. The outcome of the pilot will inform any decisions about expanding digital gilts beyond trial stages and the regulatory, operational and market changes that would be required for wider adoption.

Gilts are government bonds issued by the UK to raise funds for public spending. A digital gilt records ownership or transfer on a digital ledger or platform, which can allow faster settlement and automated record updates. The pilot aims to test whether digital records can integrate with existing financial market infrastructure while maintaining legal clarity for investors.