The Bank of England’s Sandbox Approval Notice, issued on 18 September 2026, confirms that ClearToken CSD Limited has passed Gate 2 of the Digital Securities Sandbox and is approved to operate as a Digital Securities Depository within the sandbox.
The approval covers initial book-entry recording, top-tier securities-account maintenance and operation of a securities settlement system. Eligible instruments include tokenised interests in UK government debt, sterling and non-sterling corporate bonds, and FTSE 350 shares.
The Bank set aggregate caps of £600 million for gilts, £900 million for sterling corporate bonds and £1.8 billion for non-sterling corporate bonds. The public-equity limit remains to be confirmed.
This is sandbox approval, not full CSD authorisation under the permanent UK regime. ClearToken must still satisfy the Bank’s pre-operation conditions before activity begins, and its own regulatory-status material describes ClearToken CSD as not yet operational.
FMI WORLD analysis: The interesting part is not tokenisation alone, but fungibility.
CT Register is designed to allow securities to move between conventional and tokenised form. The tokenised representation remains linked to the regulated securities record and can be de-tokenised back into conventional form rather than becoming a separate cryptoasset.
CT Settle is designed to add delivery-versus-payment (DvP), synchronising the movement of securities and cash, while CT Pay provides payment rails for cash, stablecoins and tokenised deposits.
If this works in production, an existing security could move onto digital infrastructure for settlement, collateral or repo and subsequently return to conventional form without creating a separate pool of tokenised liquidity.
That is potentially more significant than simply issuing securities on a blockchain: it introduces digital infrastructure into the existing securities lifecycle while preserving access to the traditional market.
The Bank’s approval is not evidence that the model is operational. No production transaction, participant volume or demonstrated DvP, collateral or repo workflow has yet been established.
UK and international banks, broker-dealers, asset managers, trading venues, custodians, collateral and treasury teams, repo participants, issuers of gilts and corporate debt, FTSE 350 issuers, the Bank of England, the Financial Conduct Authority and other Digital Securities Sandbox entrants.
Watch the completion of the Bank’s pre-operation conditions; confirmation of the FTSE 350 capacity limit; the first named participants and production settlements; operational proof of fungibility and tokenisation/de-tokenisation; DvP performance through CT Settle; settlement-bank and cash-leg arrangements; collateral and repo use; operating hours actually achieved; liquidity between conventional and tokenised securities; resilience and progression toward the permanent UK regime.
Verification boundary: Gate 2 permits specified live activity within the Digital Securities Sandbox subject to limits and conditions. It is not full permanent UK CSD authorisation and does not establish that ClearToken CSD is operational or that its proposed workflows have been demonstrated in production.
Primary sources — Bank of England DSS dashboard; ClearToken Gate 2 approval notice; ClearToken, 22 September 2026; CT Register; CT Settle; CT Pay.
FMI WORLD NEWSROOM story reference: FMIWT-20260923-002.