ClearToken CSD becomes first non-bank approved for live UK Digital Securities Sandbox activity

ClearToken CSD has secured Gate 2 approval from the Bank of England, making it the second firm cleared to conduct live transactions inside the UK’s Digital Securities Sandbox and the first non-bank to reach that threshold. The approval permits the startup to issue and settle tokenised versions of existing securities under central bank supervision, with its depository initially covering FTSE 350 equities, sterling government debt, and corporate bonds.

The scope of ClearToken’s authorisation is broader than the Gate 2 approval granted to HSBC in July, which was confined to digitally native bond issuance and linked to the government’s forthcoming digital gilt programme (DIGIT). ClearToken, by contrast, is built around tokenised representations of securities that already exist, and the firm has flagged plans to extend its coverage to global public equities, private funds, physical commodities, and digital assets, subject to additional regulatory sign-off.

The more operationally distinctive feature is ClearToken’s support for around-the-clock settlement, which opens the door to intraday repo arrangements where collateral can be borrowed and returned within hours rather than across conventional settlement cycles. For market participants running collateral-intensive books, that compression of the borrowing window carries meaningful implications for how liquidity buffers are sized and managed.