UK tokenized bonds could add up to £33bn by 2035

A government-backed industry task force led by Wholesale Digital Markets Champion Chris Woolard estimates the UK could add up to £33 billion to annual economic output by 2035 if it becomes a leader in tokenized financial markets.

The task force recommends a 12-month programme to run a blockchain-based test of a repurchase agreement, where securities are used as collateral to borrow cash. The report calls for the UK to issue its first tokenized gilt by the first quarter of 2027 and for tokenized securities to be usable in live markets for trading, settlement and as collateral.

The timetable in the report seeks subsequent digital-gilt offerings, live secondary-market trading and eligibility for tokenized gilts to be accepted as central bank collateral. The document urges the Bank of England to accept digital gilts as collateral so tokenized instruments can be used to raise cash and support market liquidity.

Industry members took part in developing the report. Ripple backed the initiative, noting “Onchain funds, bonds and repo aren’t experiments” and adding they are proving “cheaper, better and faster than their legacy equivalents.” The report uses the phrases “from pilots to scale” and “from ambition to action.”

Market infrastructure that could support tokenized markets already exists. The government launched a Digital Gilt Instrument pilot in November 2024 and provided a July 2025 update on plans for onchain settlement, over-the-counter trading and secondary-market development. On Feb. 12 the government appointed HSBC’s Orion platform to support the pilot.

Separately, Fnality launched a sterling-denominated payment system tied to central bank reserves on Sept. 23, 2025, designed to support real-time repo, tokenized securities settlement and cross-currency payments.

The report sets out legal, operational and market steps to test tokenized repo transactions and to integrate tokenized gilts into custody, settlement and collateral frameworks. It states tokenized securities have limited value unless they can be traded or used to obtain liquidity.

Industry participants on the task force are expected to help deliver the 12-month test and subsequent steps. The proposed timetable aims for an initial live issuance and secondary trading eligibility within a multi-year horizon, with the first tokenized government bond targeted for Q1 2027 and projected annual economic output gains of up to £33 billion by 2035 if adoption scales.

The document asks regulators and the Bank of England to adapt rules and systems so tokenized instruments can function alongside existing markets.