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Despite resistance from the UK’s Debt Management Office, City Minister Tulip Siddiq pushes for blockchain-based bonds to modernize financial markets.
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The United Kingdom’s City Minister, Tulip Siddiq, has advocated introducing blockchain-based gilt, a form of government bond issued via blockchain technology.
The push toward “digital gilts” comes despite the resistance expressed by the UK’s Debt Management Office (DMO), which expressed concerns over the move’s readiness and feasibility.
Proponents argue that adopting blockchain tech for gov’t bond issuance could modernize the UK’s financial markets and enhance the country’s global standing in digital assets.
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Blockchain-based government gilts
Siddiq’s push for digital gilts stems from a desire to ensure the UK does not fall behind its international peers in embracing blockchain technology for financial advancement.
Advocates of the move claim that blockchain gilts could simplify and improve the bond issuance process by eliminating intermediaries, including registrars and transfer agents.
The move would improve the transparency of ownership tracking and help the country establish itself as a leader in the steadily growing digital asset industry.
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Resistance from UK Debt Management Office
The UK DMO, tasked with issuing and managing government debt, has resisted Siddiq’s move toward blockchain-based gilts.
Concerns raised included the technical challenges of transitioning the long-existing traditional finance instruments to blockchain tech, including compatibility and legal considerations.
According to the Financial Times, those familiar with the discussions on the matter indicated that the DMO’s primary focus is on ensuring the minimizing cost and efficient functioning of the gilt market.
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Labour win renews push for crypto in the UK
The UK general election ended in July with a landslide victory for the country’s Labour Party, ending the Conservative Party’s 14-year stint in government.
Renewed optimism for the cryptocurrency industry followed the political change, with CryptoUK telling Cointelegraph at the time that “strong relationships” with Labour members of parliament and policymakers had been established.
The industry body highlighted the opportunity for growth under the new leadership, noting that the crypto sector could “significantly contribute” to Prime Minister Keir Starmer’s “key priorities” in job recognition, growth and inclusivity.
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This article first appeared at Cointelegraph.com News
