ClearToken Joins Bank Of England Digital Securities Sandbox
RWA Signal Insight
InfrastructureClearToken has been officially accepted into the Bank of England’s Digital Securities Sandbox (DSS) to operate as a Digital Securities Depository. This milestone allows the firm to provide tokenized versions of existing securities, enabling intraday repo settlement that eliminates traditional batch processing and end-of-day cut-offs. By facilitating settlement throughout the day, institutions can borrow against collateral more efficiently, significantly reducing financing costs. At launch, the platform will support FTSE 350 equities, GBP government debt, and various corporate bonds, with plans to expand into private funds and commodities. CEO Ben Santos-Stephens emphasized that the move addresses the critical infrastructure gap in tokenization, specifically regarding settlement, collateral mobility, and payments. ClearToken holds UK permissions for these pillars, including authorization for the cash leg of transactions. This integration into the DSS represents a major step in bridging the gap between digital innovation and regulated financial markets within the UK.
Key points
- ClearToken joins Bank of England Digital Securities Sandbox to operate a Digital Securities Depository.
- Platform enables intraday repo settlement for FTSE 350 equities, GBP government debt, and corporate bonds.
- Infrastructure supports settlement, collateral mobility, and payments under FCA and BoE oversight.
- Real-time settlement aims to reduce financing costs by replacing traditional end-of-day batch processes.
Background
The Bank of England’s Digital Securities Sandbox is a regulatory framework designed to allow firms to test distributed ledger technology in a controlled environment. It enables participants to perform activities typically reserved for central securities depositories and central counterparties while operating under modified regulatory requirements. This initiative aims to modernize UK financial market infrastructure by facilitating the issuance, settlement, and trading of tokenized assets.