diff --git a/federator/config/config.sample.js b/federator/config/config.sample.js
index 0a6e3f169..df803105d 100644
--- a/federator/config/config.sample.js
+++ b/federator/config/config.sample.js
@@ -9,4 +9,6 @@ module.exports = {
     etherscanApiKey: '',
     runHeartbeatEvery: 1, // In hours
     endpointsPort: 5000, // Server port
+    hsmPort: 6000, // [HSM] signing service port
+    hsmHost: '127.0.0.1' // [HSM] signing service host
 }
diff --git a/federator/src/lib/HSM.js b/federator/src/lib/HSM.js
new file mode 100644
index 000000000..30190a03d
--- /dev/null
+++ b/federator/src/lib/HSM.js
@@ -0,0 +1,50 @@
+const net = require('net');
+
+function hsmPayloadBuilder(command, keyId, txnHash) {
+    return `{"command":"${command}","keyId":"${keyId}","message":{"hash":"${txnHash}"},"version":2}`;
+}
+
+module.exports = class HSM {
+    constructor({
+        host = '127.0.0.1',
+        port = 6000,
+    }, logger) {
+        this.host = host;
+        this.port = port;
+        this.logger = logger;
+        this.client = null;
+    }
+
+    async receive() {
+        return new Promise((resolve, reject) => {
+            this.client.on('data', (data) => {
+                resolve(data.toString());
+                this.client.end();
+            })
+
+            this.client.on('end', () => {
+                resolve(`connection to ${this.host}:${this.port} closed`)
+            })
+
+            this.client.on('error', (err) => {
+                reject(`Error: ${err.message}`)
+            })
+        })
+    }
+
+    send(msgToSign = '') {
+        const payload = hsmPayloadBuilder(`sign`, `m/44'/60'/0'/0/0`, msgToSign);
+        return this.client.write(`${payload}\n`);
+    }
+
+    async connectSendAndReceive(msgToSign) {
+        try {
+            this.client = net.connect(this.port, this.host);
+            this.send(msgToSign);
+            return this.receive();
+        } catch(err) {
+            this.logger.error(`HSM (connectSendAndReceive)`, err);
+            throw err;
+        }
+    }
+}
\ No newline at end of file
diff --git a/federator/src/lib/TransactionSender.js b/federator/src/lib/TransactionSender.js
index 6fdb7c94d..670c715d6 100644
--- a/federator/src/lib/TransactionSender.js
+++ b/federator/src/lib/TransactionSender.js
@@ -1,9 +1,9 @@
-
 const Tx = require('ethereumjs-tx');
 const ethUtils = require('ethereumjs-util');
 const utils = require('./utils');
 const fs = require('fs');
 const axios = require('axios');
+const HSM = require('./HSM');
 
 module.exports = class TransactionSender {
     constructor(client, logger, config) {
@@ -13,6 +13,10 @@ module.exports = class TransactionSender {
         this.manuallyCheck = `${config.storagePath || __dirname}/manuallyCheck.txt`;
         this.etherscanApiKey = config.etherscanApiKey;
         this.debuggingMode = false;
+        this.hsm = new HSM({
+            port: config.hsmPort,
+            host: config.hsmHost
+        }, this.logger);
     }
 
     async getNonce(address) {
@@ -126,12 +130,32 @@ module.exports = class TransactionSender {
         return rawTx;
     }
 
-    signRawTransaction(rawTx, privateKey) {
+    async signRawTransaction(rawTx, privateKey, useHSM) {
         let tx = new Tx(rawTx);
-        tx.sign(utils.hexStringToBuffer(privateKey));
+        if(!useHSM) {
+            tx.sign(utils.hexStringToBuffer(privateKey));
+        } else {
+            const txHash = tx.hash(false).toString('hex');
+            const {
+                errorcode,
+                signature: {
+                    r,
+                    s
+                } = { r: '0x0', s: '0x0' }
+            } = JSON.parse(await this.hsm.connectSendAndReceive(txHash));
+
+            if(errorcode != 0) {
+                throw new Error(`error while signing txn with HSM`)
+            }
+
+            tx.r = Buffer.from(r, 'hex');
+            tx.s = Buffer.from(s, 'hex');
+            tx.v = Buffer.from((this.getChainId() * 2 + 8).toString());
+        }
         return tx;
     }
 
+
     async getAddress(privateKey) {
         let address = null;
         if (privateKey && privateKey.length) {
@@ -170,15 +194,15 @@ module.exports = class TransactionSender {
         return response.data;
     }
 
-    async sendTransaction(to, data, value, privateKey) {
+    async sendTransaction(to, data, value, privateKey, useHSM = false) {
         const chainId =  await this.getChainId();
         let txHash;
         let receipt;
+        let from = await this.getAddress(privateKey);
+        let rawTx = await this.createRawTransaction(from, to, data, value);
         try {
-            let from = await this.getAddress(privateKey);
-            let rawTx = await this.createRawTransaction(from, to, data, value);
-            if (privateKey && privateKey.length) {
-                let signedTx = this.signRawTransaction(rawTx, privateKey);
+            if (privateKey && privateKey.length || useHSM) {
+                let signedTx = await this.signRawTransaction(rawTx, privateKey, useHSM);
                 const serializedTx = ethUtils.bufferToHex(signedTx.serialize());
                 receipt = await this.client.eth.sendSignedTransaction(serializedTx).once('transactionHash', async (hash) => {
                     txHash = hash;
diff --git a/federator/src/lib/utils.js b/federator/src/lib/utils.js
index 0041926b4..872f3f4ec 100644
--- a/federator/src/lib/utils.js
+++ b/federator/src/lib/utils.js
@@ -177,6 +177,7 @@ async function evm_mine(iterations, web3Instance = null) {
     };
 };
 
+
 module.exports = {
     asyncMine,
     evm_mine,
@@ -193,5 +194,5 @@ module.exports = {
     zeroHash: '0x0000000000000000000000000000000000000000000000000000000000000000',
     retry,
     retry3Times,
-    getHeartbeatPollingInterval
+    getHeartbeatPollingInterval,
 }
diff --git a/federator/test/TransactionSender.test.js b/federator/test/TransactionSender.test.js
index d1214a3fa..000a9c95e 100644
--- a/federator/test/TransactionSender.test.js
+++ b/federator/test/TransactionSender.test.js
@@ -74,4 +74,40 @@ describe('TransactionSender module tests', () => {
         expect(result).toEqual(expectedAddr.toLocaleLowerCase());
     });
 
-});
\ No newline at end of file
+    it('should sign the same with HSM and web3', async () => {
+        const rawTx = {
+          chainId: 5777,
+          gasPrice: '0x6fc23ac00',
+          value: '0x0',
+          to: '0x557b77f7B280006f7732dCc123C3A966F5Fe1372',
+          data: '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',
+          from: '0x57093C0C2aFEACaF7D677356c3eAC3E99933F7C0',
+          nonce: '0x49',
+          r: 0,
+          s: 0,
+          gas: '0x284d8'
+        }
+
+        const pk  = `3f28f888373e9ad1651a1227a5efdc0d7ea55bce6de3b5448de56c8588c6bd4d`;
+        const pk2 = `dfac7a2bfe2cd7f7fc8caffd65995300eb0e1a652502147da8d7a9e5bce16ac2`;
+        const from = `0x3444f14CbC7081ADEd7203E32E65304D17fe3bdA`;
+        const sender = new TransactionSender(web3Mock, logger, {
+          hsmPort: 6000,
+          hsmHost: '127.0.0.1'
+        });
+
+        const signedRawTransaction = await sender.signRawTransaction(rawTx, pk2, false);
+        const r = signedRawTransaction.r.toString('hex');
+        const s = signedRawTransaction.s.toString('hex');
+        const v = signedRawTransaction.v.toString('hex');
+
+        const signedHsmRawTransaction = await sender.signRawTransaction(rawTx, pk2, true);
+        const rHSM = signedHsmRawTransaction.r.toString('hex');
+        const sHSM = signedHsmRawTransaction.s.toString('hex');
+        const vHSM = signedHsmRawTransaction.v.toString('hex');
+
+        expect(rHSM).toEqual(r);
+        expect(sHSM).toEqual(s);
+    });
+
+});