Bank of England clears HSBC Orion for Digital Securities Sandbox

The Bank of England has approved HSBC Orion to operate inside the United Kingdom’s Digital Securities Sandbox as a digital securities depository. The platform will support issuance, servicing and settlement of digital bonds, including the planned Digital Gilt Instrument (DIGIT).

Under the approval, HSBC Orion will run within the sandbox to enable digitally native bond issuance and post-issuance activities for sovereign and corporate debt. HSBC reported that the platform has supported more than $5 billion in digital bond issuances globally and is the first firm cleared to go live in the sandbox.

The Digital Securities Sandbox opened in 2024 and is run by the Bank of England together with the Financial Conduct Authority. The sandbox provides a live regulatory setting where firms and regulators can test distributed ledger technology for issuing, trading and settling securities under supervision.

HM Treasury expects the first DIGIT transaction in the first quarter of 2027. As part of preparations for the pilot sovereign issuance, HSBC and the London Stock Exchange Group signed a memorandum of understanding to develop connectivity to help investors access the pilot issuance and to link trading and market participants to the sandbox infrastructure.

Within the sandbox, HSBC Orion will perform depository functions that support issuance, record-keeping and settlement on tokenised ledgers. The platform will handle lifecycle events after bond issuance, including payments, transfers and updates to ownership records, using distributed ledger entries to record those actions.

Regulators will monitor how these processes work in a controlled environment before any wider use. Participation by banks, exchanges and infrastructure providers in the sandbox forms part of the UK government’s programme to test tokenisation in capital markets and to assess how digital securities could connect with existing market systems.