ClearToken CSD has received approval from the Bank of England to begin live transactions in the UK's Digital Securities Sandbox, the company said September 21. ClearToken is only the second entrant to pass "Gate 2" of the sandbox program, which allows firms to test live — not simulated — activity within defined limits.
The approval lets ClearToken operate a digital securities depository to issue and settle tokenised versions of FTSE 350 equities, UK government debt, and corporate bonds. ClearToken has positioned itself as the first financial market infrastructure provider aiming to connect conventional securities settlement with round-the-clock tokenised markets.
The Digital Securities Sandbox is a joint Bank of England and Financial Conduct Authority initiative that lets regulated firms test distributed-ledger-based infrastructure for UK financial markets under temporarily modified rules, with participants progressing through gated stages from initial testing toward full live operation.
ClearToken first entered the sandbox in December 2024, when it passed Gate 1. Its Gate 2 clearance, nearly two years later, marks one of the most concrete UK regulatory milestones yet for tokenised capital-markets infrastructure moving from pilot toward live — if still limited and scope-bound — operation.
ClearToken did not disclose a timeline for expanding beyond the initial eligible asset classes, or transaction volume expected under the sandbox's defined limits.