The London Stock Exchange Group (LSEG) has unveiled the latest leg of its tokenization strategy, a Digital Securities Sandbox (DSD) which it plans to launch this year, subject to regulatory approval. The goal is to enable on-chain settlement and create an institutional infrastructure to connect conventional and digital markets across multiple distributed ledgers and blockchains. The DSD will operate under the UK’s Digital Securities Sandbox regulatory framework.
One of the most sought after tokenization use cases in institutional markets is tokenized collateral, which the DSD aims to support across fixed income, equities, and private markets. DSD is the term used as part of the UK’s Digital Securities Sandbox (DSS) for the DLT version of a central securities depository. LSEG B3 has passed the DSS Gate 1, the preliminary stage that does not permit live trading or settlement activity.
Daniel Maguire, Group Head of Markets, LSEG described DSD as “a seamless ecosystem in which participants can move effortlessly between digital and traditional markets, connected across time zones and choice of payment options.”
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