ClearToken wins Bank of England sandbox approval to operate Digital Securities Depository

ClearToken CSD Limited has received approval to operate a Digital Securities Depository (DSD) within the Bank of England's Digital Securities Sandbox (DSS), the London-based digital financial market infrastructure group announced on 22 September 2026. The approval enables regulated, continuous 24/7 settlement for tokenised debt and equities, with a phased expansion to additional asset classes planned in subsequent stages.

From Sandbox Entrant to Depository Operator

ClearToken's path through the DSS began on 16 December 2024, when the firm joined the programme as a Sandbox Entrant — the initial admission tier in the DSS framework. In regulatory terms, this first stage allows firms to commence sandbox activity under initial regulatory oversight before they can progress to deeper operational permissions, such as DSD authorisation. The DSD approval announced on 22 September 2026 represents ClearToken's advancement beyond that initial standing.

The DSS is jointly overseen by the Bank of England and the Financial Conduct Authority. The programme is structured to be iterative and time-limited, an approach consistent with the Bank of England's published DSS framework documentation, which sets out how participants progress through successive gates toward broader operational capability.

ClearToken's progression from initial sandbox admission in December 2024 to a full Digital Securities Depository approval by September 2026 illustrates the structured, staged pathway the DSS is designed to provide for firms developing tokenised financial market infrastructure.

Settlement Scope and Phased Expansion

The DSD authorisation permits ClearToken to provide regulated settlement services on a continuous basis — around the clock, every day — for tokenised debt instruments and equities. The firm has indicated that expansion to additional asset classes will follow in phases, though the specific sequencing and timeline for those phases were not detailed in the verified source material reviewed for this article.

Continuous settlement capability represents a meaningful operational departure from conventional market infrastructure, which typically operates within defined trading-day windows. In analytical terms, 24/7 settlement for tokenised securities requires the underlying infrastructure to handle both the digital asset leg and any associated cash or collateral leg without reliance on traditional batch-processing cycles.

A Separate Application for Central Counterparty Status

Distinct from the DSD approval, ClearToken filed an application with the Bank of England on 14 September 2026 — eight days before the DSD announcement — seeking authorisation to operate CT Clear as a Central Counterparty (CCP). A CCP sits between the two sides of a trade, novating contracts and managing counterparty credit risk; that function is separate from the custody and settlement role covered by the DSD authorisation. As of the sources reviewed, the CCP application had not been approved, and it is reported here solely as a filed application.

The distinction matters editorially. ClearToken is consistently described in its own press materials, and corroborated by secondary sources, as a digital financial market infrastructure group — not a clearing house. The DSD approval pertains to custody and settlement operations; any characterisation of the firm as a clearing provider would be premature pending the outcome of the CCP application.

Regulatory Context

The DSS is jointly administered by the Bank of England and the FCA. The sandbox framework is designed to allow firms to develop and test digital securities infrastructure in a regulated environment, with progressive gates providing increasing operational scope as firms demonstrate readiness. ClearToken's DSS participation spans both the initial Sandbox Entrant stage, from December 2024, and — following the September 2026 approval — active DSD operations.

Analysts note that approvals of this type within the DSS are significant markers of the UK's incremental approach to integrating tokenised securities into regulated market infrastructure, proceeding through supervised experimentation rather than wholesale legislative replacement of existing settlement architecture.

The Bank of England's DSS dashboard and the FCA's DSS pages serve as the primary public registers of current sandbox participants and their authorisation status.