HSBC became the first firm cleared by the Bank of England to operate live digital securities depository services inside the United Kingdom's Digital Securities Sandbox in July 2026. The approval permits HSBC's Orion platform to support tokenised bond issuance and the UK government's planned digital gilt pilot known as DIGIT. HSBC Bank Plc passed Gate 1 in July 2025 and became the first entrant to pass Gate 2 in July 2026, according to the Bank of England's DSS dashboard. The Digital Securities Sandbox allows approved firms to operate securities settlement and trading infrastructure under temporarily modified UK legislation, giving regulators a controlled environment to test whether distributed ledger technology can handle functions normally performed by central securities depositories.
HSBC Receives Gate 2 Approval for Live Digital Securities Operations
The Gate 2 approval moves HSBC through the point at which firms can conduct regulated activity with live financial instruments rather than remain in preparation or testing. HSBC Orion will operate as a digital securities depository, allowing digital securities to be issued, recorded, serviced and settled using distributed ledger technology. The platform will support digitally native corporate and sovereign bonds, including the UK government's planned Digital Gilt Instrument.
The approval gives HSBC permission to operate the digital depository itself within Britain's domestic market infrastructure framework. That distinction puts HSBC in a position different from a bank acting only as arranger, dealer or technology provider for a single digital issuance.
HSBC Orion Selected as Platform Provider for UK Digital Gilt Pilot
HM Treasury selected HSBC Orion as the platform provider for DIGIT in February after a procurement process that began with an invitation to tender in October 2025. The first DIGIT transaction is expected by the end of the first quarter of 2027. The instrument will be issued and settled on HSBC Orion rather than through the infrastructure used for conventional gilts.
The pilot is designed to test whether distributed ledger technology can shorten settlement times, reduce operational costs and improve how ownership records and transaction data are maintained. It will not replace the UK's existing gilt programme. HM Treasury has said future DIGIT issuance will depend on the outcome of the first transaction.
HSBC and LSEG Sign MOU for System Connectivity
HSBC and London Stock Exchange Group have signed a memorandum of understanding to develop connectivity between their systems to support investor access to the pilot bond. The arrangement is intended to link HSBC Orion's depository infrastructure with LSEG's distribution and market-access capabilities. The government has not yet disclosed detailed technical specifications or the final structure for secondary-market trading.
HSBC Orion Platform History and Transaction Record
HSBC launched HSBC Orion in 2022 as a proprietary tokenisation platform for bond issuance, supporting registration, issuance and activity across primary and secondary markets. The platform has supported several transactions, including the European Investment Bank's digital sterling bond in 2023 and a HK$6 billion-equivalent multi-currency digital green bond issued by the Hong Kong government in 2024.
It has also supported Luxembourg's first digital treasury certificates, digital bond transactions from Qatar's QNB Group and First Abu Dhabi Bank, and a HK$10 billion four-currency green bond from Hong Kong in 2025. HSBC said Orion has now supported more than $5 billion in digital bond issuance globally.
The Digital Securities Sandbox was launched by the Bank of England and Financial Conduct Authority in September 2024 and is scheduled to run until January 2029. Other major financial institutions, including LSEG, JPMorgan and Tradeweb, have passed Gate 1 of the DSS, but HSBC was the first to receive Gate 2 approval and move into live activity.
FAQ
What did HSBC receive approval for in July 2026?
HSBC became the first firm cleared by the Bank of England to operate live digital securities depository services inside the United Kingdom's Digital Securities Sandbox in July 2026. The approval permits HSBC's Orion platform to support tokenised bond issuance and the UK government's planned digital gilt pilot.
When is the first DIGIT transaction expected?
The first DIGIT transaction is expected by the end of the first quarter of 2027. The instrument will be issued and settled on HSBC Orion rather than through the infrastructure used for conventional gilts.
How much digital bond issuance has HSBC Orion supported?
HSBC said Orion has supported more than $5 billion in digital bond issuance globally since its launch in 2022. The platform has supported transactions including the European Investment Bank's digital sterling bond in 2023 and a HK$6 billion-equivalent multi-currency digital green bond issued by the Hong Kong government in 2024.
