This story was originally published on HackerNoon at: https://hackernoon.com/why-governments-and-institutions-are-putting-sovereign-debt-onchain.
Governments from Hong Kong to the Marshall Islands are issuing debt onchain. Here is what blockchain changes for sovereign bonds.
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Yesterday the European Central Bank launched Pontes, a live service that settles tokenised assets in central bank money. It also said it will invest part of its own funds in tokenised euro-area government bonds. Hong Kong has sold HK$16.8 billion of digital government bonds across three issues. The UK's digital gilt is scheduled for early 2027. This is no longer a pilot phase.
The reasons are concrete: settlement that closes in seconds rather than a day, on every day of the year; bonds that carry their own compliance and payment logic; cash legs that settle in stablecoins or tokenised central bank money; issuance and servicing costs that the industry puts at $15 to $20 billion a year in potential savings; and minimum tickets that fall from $100,000 to $30 or less.
The case study is Stellar. It holds about $490 million of tokenised non-US government debt, more than any other public blockchain, out of a $1.06 billion global total. It passed Ethereum in that category in February 2026 and has stayed ahead every day since.
The roster on Stellar spans five continents: Spiko's euro T-bill fund, Etherfuse Stablebonds wrapping Mexican CETES and Brazilian Tesouro paper, South Korean Treasury Bonds, the Marshall Islands' USDM1 sovereign bond, plus BENJI, USDY and WTGXX on the US side. Total tokenised real-world assets on the network went from about $500 million in early 2025 to $4 billion by the end of August.
What is still missing is the cash leg for the largest sovereign markets. The UK's pilot hinges on it, the ECB has just built it and Stellar's answer is native USDC and euro stablecoins already on the ledger.