Key facts
- HSBC Orion has been approved by the Bank of England to operate in the Digital Securities Sandbox.
- HSBC Orion will function as a digital securities depository, supporting digitally native bond issuance.
- The first transaction involving a Digital Gilt Instrument is projected for the first quarter of 2027.
- The Digital Securities Sandbox is a joint initiative by the Bank of England and the Financial Conduct Authority.
HSBC has secured approval from the Bank of England to participate in its Digital Securities Sandbox (DSS), allowing its digital assets platform, HSBC Orion, to go live. This marks the first time a company has been granted operational approval within the UK's regulatory sandbox designed for testing new securities market technologies.
HSBC Orion will function as a digital securities depository, capable of supporting the issuance, servicing, and settlement of digital securities, including digitally native bond issuances and the UK's planned digital sovereign bond, the Digital Gilt Instrument (DIGIT). The bank stated that HSBC Orion has already facilitated over $5 billion in digital bond issuances globally.
The first transaction involving the Digital Gilt Instrument is anticipated in the first quarter of 2027. In conjunction with this development, HM Treasury announced that HSBC and the London Stock Exchange Group have signed a memorandum of understanding to enhance connectivity and investor access to the pilot issuance.
The Digital Securities Sandbox, launched in 2024, is operated collaboratively by the Bank of England and the Financial Conduct Authority. Its purpose is to test distributed ledger technology for the issuance, trading, and settlement of securities within a live regulatory framework.