Approval enables regulated continuous 24/7 settlement for tokenised debt and equities, with a phased expansion to additional asset classes

ClearToken CSD Limited, part of ClearToken’s digital financial market infrastructure group, has been approved by the Bank of England to operate a Digital Securities Depository (DSD) in the Digital Securities Sandbox (DSS). The approval, known as “Gate 2”, allows ClearToken CSD to issue and settle tokenised versions of existing securities under the Bank’s supervision under certain limits. The approval means that ClearToken CSD becomes:

• The first DSD approved to settle tokenised equities and corporate bonds, alongside sovereign debt.
• The second firm to pass Gate 2, and the first non-bank.
• The first cloud-native securities settlement system in the UK.
• The first FMI to bridge traditional and 24/7 tokenised securities markets.
• The first FMI to support intraday repo on a 24/7 basis.

Enabling 24/7 collateral mobilisation and intraday repo

The approval delivers to UK markets a regulated, neutral post-trade infrastructure through which tokenised securities can be settled, mobilised as collateral and financed around the clock. This enables an institutional market-first: the ability to settle repo intraday on a 24/7 basis. This means that institutions no longer need to rely on batch processes and end-of-day cut-offs. With settlement available throughout the day, participants can borrow against collateral for hours rather than days, reducing the cost of financing. ClearToken CSD’s model ensures fungibility between digital and traditional securities by using the same ISINs, ensuring that liquidity is not fragmented and that users’ rights are always preserved.

Phased roadmap of collateral activation

At launch, ClearToken CSD’s live settlement services will support FTSE 350 equities, GBP government debt, and GBP and Non-GBP corporate bonds, allowing all to be used as collateral for securities financing transactions.

Subject to further approval from the Bank of England, ClearToken CSD intends to expand eligibility in phases to additional asset classes including global public equities, private funds, and physical commodities (such as gold) and digital assets.

This will amplify institutional collateral management on their existing architecture. With ClearToken CSD, an institution could hold an asset it already owns, whether a security, commodity or a money market fund unit, in a single legal form carrying an ISIN that settles 24/7 and books directly into the collateral and treasury systems the institution already runs.

Ben Santos-Stephens, CEO of ClearToken Group, said: “Our approval to operate a live DSD is hugely significant for the market. The biggest hurdle for institutional adoption of digital securities has not necessarily been the technology; it has been whether the infrastructure around that technology is sufficiently regulated, robust and legally recognised. Banks, asset managers and other market participants can now have confidence that digital securities can operate within a trusted, regulated post-trade framework alongside traditional financial assets.”

Akash Sharma, Head of Policy & Regulatory Affairs at ClearToken Group, said: “The UK has turned a tokenisation framework into a live, supervised market infrastructure where regulated institutions can settle assets carrying real rights. Institutions take their certainty from a rulebook, default arrangements and a named, accountable operator standing behind the ledger. That is what ClearToken CSD provides.”

“We thank the Bank of England and the Financial Conduct Authority for a rigorous and proportionate process, and for their engagement throughout. Today’s approval is evidence of the UK’s commitment to innovation in financial markets.”

Ben Santos-Stephens, CEO of ClearToken Group, added: “The missing piece in tokenisation was never asset issuance, it was the market infrastructure behind it. Settlement, collateral mobility, and payments are the pillars that enable real-world adoption. Today, ClearToken is uniquely positioned, holding UK permissions for all three, with the cash leg already authorised, helping bridge the gap between digital innovation and regulated financial markets.”

ClearToken’s unique horizontal clearing and settlement model

ClearToken is building a single post-trade service for tokenised assets across three regulated entities, bringing fragmented offerings into one integrated, neutral service for clients covering settlement of the securities leg, movement of cash, and clearing of financing trades and derivatives.

Each of the three has now reached a regulatory milestone: ClearToken Depository Limited is authorised as an Authorised Payment Institution regulated by the FCA and a registered cryptoasset firm, settling fiat, stablecoins and cryptoassets; ClearToken CSD Limited has passed Gate 2 and will operate as a Digital Securities Depository; and, ClearToken CCP Limited has submitted its application to the Bank of England for authorisation as a central counterparty.

ClearToken’s approach means that an asset can now be issued, settled, financed and paid for, all within a safe, regulated perimeter.

Join market working groups

ClearToken invites institutional market participants, investment banks, and trading venues to join its active market working groups. These groups will collaborate directly to design the operational frameworks, collateral workflows, and settlement rules required to scale adoption.

Source: ClearToken