Tokenised securities (digital shares and bonds)
Shares or bonds issued and recorded on a blockchain or similar digital ledger, instead of in a traditional register. A UK sandbox lets approved venues issue and trade them, but this is new and mainly for larger issuers.
- Shares
How it works
A tokenised security is an ordinary share, bond or fund unit whose ownership is recorded and transferred using distributed ledger technology (a blockchain or similar shared database). It is not the same as a crypto token from a token offering: it is a security.
In the UK, live issuance and trading happen mainly through the Digital Securities Sandbox (DSS), run jointly by the Bank of England and the FCA.
- Approved firms can run trading venues and settlement systems for tokenised securities in the sandbox.
- In-scope instruments are equities, bonds, money market instruments, fund units and emissions allowances.
- The sandbox runs until December 2028, which the government can extend. The window to apply is expected to close around March 2027.
- In May 2026 the FCA and Bank of England set out a shared vision for tokenisation in wholesale markets and asked for industry views.
A company would usually issue tokenised shares or bonds through one of these venues, with legal and technical advisers. Tokenised bonds are borrowing: you give up no shares.
Upsides and downsides
Upsides
- A regulator-backed sandbox to issue and trade securities on new technology
- The FCA expects these securities to be usable in broadly the same way as traditional ones
- Tokenised bonds let you borrow without giving up shares
Downsides
- Very new, with few venues and investors so far
- Mainly for larger issuers and wholesale markets
- Rules are still developing
Risks
- Too few investors or too little trading in the tokens
- Technology or venue failure
- Rule changes when the sandbox ends or is extended
What it costs
- How it is priced
- Shares sold to investors, or interest on tokenised bonds, plus venue, legal and technology costs
- Costs that are easy to miss
- Legal, technology and venue costs for a new kind of issue
- Uncertainty while rules are still being developed
Set by each issue. The sandbox is aimed at wholesale markets.
Does it fit?
Could fit when
- You are a larger company interested in issuing shares or bonds on a digital platform
- Your business already works with blockchain technology
Unlikely to fit when
- You are a small or early-stage business (this is aimed at larger issuers)
Who can use it
- Business types: Private limited company, Public limited company
- Issued through a venue approved in the Digital Securities Sandbox
- Usually larger issuers and wholesale investors
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all tokens and digital assets
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- A sandbox venue
- Legal structure
- Interested investors
Regulation and protections
Venues and settlement systems in the Digital Securities Sandbox are overseen jointly by the Bank of England and the FCA.
Types of provider: Venues and settlement systems approved in the Digital Securities Sandbox; Legal and technology advisers.
Also consider
Sources
- FCA: Digital Securities Sandbox (DSS) · checked 7 October 2026
- Bank of England: FCA and BoE set out shared vision for tokenisation in UK wholesale markets (May 2026) · checked 7 October 2026