The Bank of England (BoE) has given HSBC approval to go live in the UK’s Digital Securities Sandbox (DSS).

Approval for the DSS scheme waives legacy regulations such that firms can carry out securities depository and settlement services whilst operating a trading venue. It means that HSBC will now be able to carry out live testing and provide the BoE with real-world data on the effectiveness of distributed ledger technology (DLT) and tokenisation.

HSBC said it would set its digital assets platform HSBC Orion live in the DSS as a digital securities depository (DSD) for digitally native bond issuance, servicing and settlement, and corporate bonds.

It added that the HSBC Orion will host the first transaction of the government’s Digital Gilt Instrument (DIGIT) in the first quarter of 2027. First announced in February, the transaction will pilot the issuance of sovereign bonds using DLT.

Patrick George, Global Head of Markets & Securities Services, HSBC, said: “We welcome the Bank of England’s approval for HSBC Orion to be the first digital assets platform to go live in the Digital Securities Sandbox. Having been appointed earlier this year as the issuance platform provider for the DIGIT, we look forward to the inaugural DIGIT pilot issuance, which will be a key event for digital assets in the UK.”

In April, HSBC completed a tokenised deposits pilot on the Canton Network, a public blockchain network launched by a banking tech consortium including BNP Paribas, Deloitte, Goldman Sachs, and Microsoft.

The government is pushing ahead with tests on the digitisation of financial markets in pursuit of innovation across the sector. In an inaugural report published last week, the treasury wholesale digital markets champion Chris Woolard said that the a shift to digitised finances could drive a £33 billion economic uplift for the UK economy.

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