ClearToken wins Bank of England approval to settle tokenised FTSE 350 shares and gilts
Updated: 6 days ago
The Bank of England has cleared a company that is not a bank to run a live digital securities depository, and the assets on its opening list are ordinary listed shares and government bonds rather than anything experimental.
ClearToken CSD Limited was approved on 22 September 2026 to operate a Digital Securities Depository inside the Bank of England's Digital Securities Sandbox, according to a statement the company issued from London that day. Asset Servicing Times, reporting the same date, said the approval came from the Bank of England together with the Financial Conduct Authority.
A digital securities depository is the institution that holds the definitive record of who owns a security and moves that record when a trade settles. In conventional UK markets that job belongs to Euroclear UK and International, which operates the CREST system. A depository is not a trading venue and it does not set prices. It is the layer at which ownership becomes legally real, which is why the permission granted here is more consequential than most announcements carrying the word tokenisation.
The permission covers tokenised versions of securities that already exist rather than assets created on a blockchain from scratch. At launch ClearToken says the depository will handle FTSE 350 equities, sterling denominated government debt, and corporate bonds in sterling and other currencies. All of them can be used as collateral, meaning pledged as security against a borrowing, and settled continuously rather than on the market's usual timetable. That includes intraday repo, a short term financing trade in which one party sells securities and agrees to buy them back within the same day.
"The missing piece in tokenisation was never asset issuance, it was the market infrastructure," said Ben Santos-Stephens, chief executive of ClearToken Group, in the company's statement. He added that approval to operate a live depository was "hugely significant for the market".
What Gate 2 actually grants
The Digital Securities Sandbox is structured in gates. Entry and testing come first, and live activity comes later. ClearToken announced on 16 December 2024 that it had been admitted to the sandbox and had passed Gate 1, at which point it was testing its depository platform in a non live environment. Gate 2 is the step that allows real activity with real securities under supervision.
ClearToken describes itself as the second firm to pass Gate 2 and the first that is not a bank, the first depository cleared to settle tokenised equities and corporate bonds alongside sovereign debt, the first cloud native securities settlement system in the UK, and the first able to support 24 hour intraday repo. The Bank of England has not published a league table of sandbox entrants, so these are the company's own characterisations of its position rather than regulatory findings.
The company has more in front of the Bank. On 14 September 2026 it said it had applied for authorisation to launch CT Clear as a central counterparty, the entity that sits between buyer and seller and guarantees a trade if one side fails. Subject to further Bank approval, ClearToken says the depository would later extend to global public equities, private funds, physical commodities including gold, and digital assets.
Akash Sharma, the company's head of policy and regulatory affairs, framed the approval as a statement about the UK rather than about one firm, saying that the country "has turned a tokenisation framework into a live, supervised market infrastructure where regulated institutions can settle assets carrying real rights".
The asset list is the story
For a UK founder or an early stage investor, the temptation is to read this as tokenised share registers arriving in the mainstream. The asset list argues otherwise. Everything cleared for launch is already admitted to public markets: index constituents, gilts, corporate bonds. Private company shares are not on it, and neither the Bank of England nor the FCA has said whether or when shares in unlisted companies might be admitted to a depository operating under this regime.
That matters because the recurring claim made for tokenised equity in private companies is that a distributed register can carry legal title as reliably as a paper or CREST register does. What the Bank has done here is grant that standing to a specific operator, for a specific list of already regulated instruments, inside a supervised sandbox with a named, accountable company behind the ledger. It has not made a general finding about ledgers.
The more useful read is directional. The institutions that will one day decide whether private company shares can sit on the same rails are watching whether this works at the boring end first: settlement finality, collateral treatment, default arrangements, what happens at close of business. The FCA and the Bank set out the route from sandbox testing to permanent rules earlier in September. This approval is the first time the depository layer of that route has been handed to a firm outside the banking system.
How we got here
The Digital Securities Sandbox opened on 30 September 2024. It was the first financial market infrastructure sandbox created under powers that the Financial Services and Markets Act 2023 gave the Treasury, and it lets firms run depositories and trading venues on new technology under modified rules. According to PwC's summary of the regime, it is due to operate until December 2028, with the government able to extend it, and the application window is expected to close around March 2027.
Firms move through four stages. Gate 1 is non live testing as a sandbox entrant. Gate 2 allows live business under firm specific limits, with the designation of Digital Securities Depository or trading venue operator. Gate 3 lets a firm scale towards full authorisation, and Gate 4 would be a permanent regime outside the sandbox, the form of which is still to be decided.
The first firm through Gate 2 was HSBC, whose approval was reported on 20 July 2026. It allows HSBC Orion to act as a depository for digitally native bonds, including corporate bonds of up to £900 million, and covers the planned digital gilt, DIGIT, which the Chancellor expects to be issued for the first time by the first quarter of 2027.
What it means for UK founders
The sandbox is open to firms of all sizes, including new entrants, provided they are established in the UK, carry out market infrastructure activities in in-scope securities and can point to a legal or regulatory barrier their technology faces. A depository's minimum capital requirement in the sandbox is six months of operating expenses. Cryptoassets that are not financial instruments, including stablecoins, are out of scope.
The practical point is timing. With applications expected to close around March 2027 and the sandbox scheduled to run to December 2028, a startup planning to build market infrastructure in this space has a short window to enter. Startups that want their own shares tokenised are in a different position, still waiting on the private company question raised above. Founders considering either path may want to take professional advice.
Key facts at a glance
30 September 2024: the Digital Securities Sandbox opens.
16 December 2024: ClearToken admitted as a sandbox entrant at Gate 1.
20 July 2026: HSBC reported as the first firm through Gate 2.
22 September 2026: ClearToken CSD approved at Gate 2.
Around March 2027: application window expected to close.
December 2028: scheduled end of the sandbox, which the government can extend.
Further reading
Frequently asked questions
What did the Bank of England approve ClearToken to do?
ClearToken CSD Limited was approved on 22 September 2026 to operate a live Digital Securities Depository inside the Bank of England's Digital Securities Sandbox. Asset Servicing Times reported that the approval came from the Bank of England together with the Financial Conduct Authority.
Which assets can the ClearToken digital securities depository settle at launch?
ClearToken says it will handle tokenised FTSE 350 equities, sterling denominated government debt, and corporate bonds in sterling and other currencies. All can be used as collateral and settled continuously, including intraday repo.
What is Gate 2 in the Bank of England Digital Securities Sandbox?
The Digital Securities Sandbox is structured in gates, with entry and testing first and live activity later. Gate 2 is the step that allows real activity with real securities under supervision. ClearToken passed Gate 1 in December 2024, when it was testing in a non live environment.
Can private company shares be settled through ClearToken's depository?
Private company shares are not on the approved list. Neither the Bank of England nor the FCA has said whether or when shares in unlisted companies might be admitted to a depository operating under this regime.
What is CT Clear?
CT Clear is a central counterparty that ClearToken said on 14 September 2026 it had applied for authorisation to launch. A central counterparty sits between buyer and seller and guarantees a trade if one side fails. The application has not yet been decided.
This is general information, not legal, tax or investment advice.
Key takeaways
ClearToken CSD Limited was approved on 22 September 2026 to run a live Digital Securities Depository in the Bank of England's Digital Securities Sandbox, the layer at which ownership of a security is recorded and transferred.
The opening asset list is FTSE 350 equities, sterling government debt, and sterling and non sterling corporate bonds, all usable as collateral with continuous settlement and intraday repo.
ClearToken says it is the second firm through Gate 2 and the first that is not a bank. The Bank of England has not published a comparison of entrants.
Private company shares are not on the approved list, and no UK regulator has said whether they will be.
A separate application to run a central counterparty, CT Clear, was announced on 14 September 2026 and has not been decided.
Sources
ClearToken, "ClearToken Approved to Operate a Digital Securities Depository in the Bank of England's Digital Securities Sandbox", 22 September 2026.
Asset Servicing Times, "ClearToken receives BoE approval for digital securities depository", 22 September 2026.
Markets Media, "ClearToken Digital Securities Depository Approved in BoE Sandbox", 23 September 2026.
ClearToken, "ClearToken Joins the UK Digital Securities Sandbox as a Sandbox Entrant", 16 December 2024.
ClearToken press release index, entry dated 14 September 2026 on the CT Clear central counterparty application.
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