Three firms can now run live tokenised markets in the UK

Three companies have passed Digital Securities Sandbox Gate 2, the Bank of England's second review, which lets a firm start running live, supervised markets for digitally recorded bonds and shares. HSBC, ClearToken and LSEG B3 cleared it on 13 July, 18 September and 23 October 2026, and the gaps between approvals have shrunk from 67 days to 35.

Tokenisation means recording who owns a share or bond on a shared digital ledger, rather than in a chain of separate databases held by banks and clearing houses. The result is tokenised shares and bonds. The promise is faster settlement, lower cost and, in time, easier ways for smaller companies to raise money. The Digital Securities Sandbox is the UK's supervised test of that idea, using real assets under the Bank's watch.

What ClearToken, HSBC Orion and LSEG B3 can handle

Each firm has a ceiling on volume. HSBC and ClearToken can each handle £900 million of sterling company bonds. ClearToken can also handle up to £600 million of UK government debt and £1.8 billion of non-sterling company bonds. The limits for HSBC's government debt and ClearToken's FTSE 350 shares are still to be confirmed.

These are testing limits, and the Bank says it will update them as firms go live. Two of the firms are also barred from serving retail customers directly, so for now this is institutional plumbing. The ClearToken approval to settle tokenised FTSE 350 shares and gilts was covered in September.

DIGIT digital gilt is the first big test

DIGIT is the Treasury's pilot digital gilt, a UK government bond issued digitally from the start, due by the end of March 2027. HSBC Orion, HSBC's platform, will issue it, and LSEG B3 gives investors a second way to hold it through a link the Bank approved. Six banks were named in October to run the sale.

Lucy Rigby KC MP, Economic Secretary to the Treasury, said on 2 November: "Today's announcements take us another step closer to issuing the UK's first digitally native government bond early next year."

One legal step is still missing. Settlement finality is the rule that makes a completed trade legally unbreakable even if one side later collapses. The Bank has not yet granted it to HSBC or LSEG, so completed transfers do not yet have that protection. There are 149 days between 2 November 2026 and 31 March 2027 to close the gap.

What the sandbox means for founders and investors

The sandbox is the first rung of a ladder. The Bank and the FCA have set out a route from sandbox to permanent rules, and permanent rules are what would let smaller issuers use the same rails. For investors, the early signal is that regulated depositories, not loose online platforms, are the ones being approved to hold these assets.

The counter argument is that DIGIT is a short-dated pilot outside the government's main debt programme. A delay to settlement finality would hold up a trial, not the gilt market. Expect the effect on private companies to take longer to arrive than the headlines suggest.

Key takeaways

• HSBC, ClearToken and LSEG B3 have passed Digital Securities Sandbox Gate 2, on 13 July, 18 September and 23 October 2026.

• HSBC and ClearToken can each handle £900 million of sterling company bonds, and ClearToken up to £600 million of UK government debt.

• Settlement finality, the legal protection for completed trades, has not yet been granted to HSBC or LSEG.

• The DIGIT digital gilt pilot is due by 31 March 2027, 149 days after 2 November 2026.