According to the Financial Times, she wants the UK to start issuing gilts using blockchain technology, the same technology that powers cryptocurrencies like Bitcoin.
The idea of these “digital gilts” is catching some attention, but not everyone is on board. Let’s discover more about these blockchain-based bonds.
What Are Digital Gilts?
The UK’s Debt Management Office (DMO), which is in charge of managing the country’s debt, isn’t sold on the idea yet. They have concerns about whether the technology is ready and whether it will be worth the effort.
Government bonds, known as gilts in the UK, are a way for the government to borrow money from people or institutions. In return, they pay back that money over time with interest. Right now, this process involves a lot of middlemen, like banks and agents, to keep track of who owns what. Siddiq’s plan is to use blockchain technology to get rid of these intermediaries, making the process faster and more efficient.
We agree with the City Minister that the “UK risks being left behind by global peers” if we do not move ahead swiftly to capitalise on the benefits of #Blockchain Technologies.
UK’s National Blockchain Roadmap Vision 2030 recommended making evidence-based policies on Blockchain… pic.twitter.com/sVcpBlJ1D6
— The British Blockchain Association (@Brit_blockchain) October 2, 2024
By using blockchain, the ownership of bonds would be tracked more easily. This makes it clear who owns each bond at any given time. This transparency could make the system more secure and less prone to errors. Plus, it could save money by cutting out the middlemen.
According to reports, the DMO’s main goal is to keep costs low and ensure that the gilt market keeps running smoothly. They’re not sure if switching to blockchain is the best way to do that right now.
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This articles is written by : Fady Askharoun Samy Askharoun
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