Britain plans to start issuing digital government bonds within the next two years, with Chancellor of the Exchequer Rachel Reeves expected to announce a trial digital bond issuance in a speech at Mansion House in the City of London on Thursday, according to people familiar with the matter. It is understood that the chancellor traditionally uses this forum to announce policies to support the financial industry.
The New Labour government is working to modernize financial markets and is currently using blockchain technology to "tokenize" government debt, hoping that this move will make government bond trading faster and cheaper.
The digital transformation comes as the British government is embarking on a £297 billion ($382 billion) borrowing program, the second largest in history, with sales expected to remain high in the coming years. People familiar with the matter said that legislation may need to be submitted to Parliament for blockchain-based sales to proceed. The UK Treasury declined to comment. (Bloomberg)