Paxos wins SEC approval to clear U.S. stocks on blockchain
Paxos new license positions it alongside legacy giants such as DTCC and makes it a compelling, more efficient alternative for traditional finance giants than legacy competitors.
What to know:
- Paxos Securities Settlement Company, LLC has received full registration to provide clearing and settlement services by the U.S. SEC.
- The approval clears a bottleneck for Paxos’ goals for institutional tokenization of real-world assets.
- With blockchain as the clearing rail, PSSC can settle eligible securities on a same-day or nearly instantly, eliminating the traditional settlement window and freeing up locked capital for institutional participants.
The approval clears a bottleneck for Paxos’ goals for institutional tokenization of real-world assets (RWAs), providing market participants with a pipeline to clear and settle digital asset trades involving traditional equities, per SEC’s response to Paxos on March 11.
Paxos, which already holds licenses from the OCC in the U.S., Singapore’s MAS, and Europe’s FIN-FSA. said the central clearinghouse designation also allows it to bundle regulated stock clearing with its existing white-label infrastructure tools used by PayPal and Mastercard.
The SEC first granted Paxos no-action relief in 2019, allowing the firm to develop a live settlement pilot in February 2020, which allowed it to integrate traditional finance (TradFi) giants such Bank of America, Credit Suisse and Societe Generale to clear daily U.S. equities transitions.
