Paxos First Blockchain Firm Approved by SEC to Settle Securities

The U.S. Securities and Exchange Commission has registered Paxos Securities Settlement Company (PSSC) as a clearing agency, enabling Paxos to clear and settle eligible U.S. securities using blockchain technology.

PSSC may operate as a central securities depository alongside existing providers such as the Depository Trust & Clearing Corporation. Paxos has run daily clearing and settlement of U.S. equities with participating financial institutions since 2020 under SEC no-action relief; the registration formalizes those activities under the agency’s regulatory framework.

PSSC records and transfers ownership of eligible securities on a distributed ledger. Paxos says the ledger-based process shortens the time between trade execution and final settlement, supporting same-day or near-instant settlement, and that the system can maintain custody and transfer records as a registered clearing agency.

Financial firms that took part in Paxos’ earlier testing settled trades daily through the platform. With SEC registration, PSSC can offer clearing and settlement services more broadly to market participants under SEC supervision.

Charles Cascarilla, Paxos’s chief executive, commented that the registration enables PSSC to provide clearing and settlement services for eligible securities and to offer infrastructure for partners to use blockchain technology.

Paxos issues stablecoins and develops blockchain infrastructure. The SEC registration is the first approval for a firm founded on blockchain technology to provide clearing and settlement services under U.S. regulation. The company can now accept and process transactions in eligible securities and operate as a registered clearing agency alongside established post-trade providers.