Paxos Securities Settlement Company has been registered by the SEC as a clearing agency, making it the only blockchain-native firm with this status in the U.S.
Paxos Achieves SEC Registration
Paxos Securities Settlement Company has officially received registration from the Securities and Exchange Commission (SEC) to operate as a clearing agency. This significant milestone allows Paxos to act as a central securities depository while ensuring compliance with ongoing regulatory standards.
This registration marks Paxos as the only blockchain-native company recognized by the SEC for this role in the United States, according to a company announcement. CEO Charles Cascarilla highlighted that this achievement is the culmination of a seven-year regulatory journey, which began with a No-Action Letter in 2019 and included a pilot program initiated in February 2020.
The SEC's order stipulates that the registration is temporary, permitting Paxos to provide clearing and settlement services while adhering to regulatory obligations. Cascarilla noted that this development enhances Paxos's ability to deliver comprehensive infrastructure for partners adapting to the evolving market and blockchain technology.
The pilot program has been operational since February 2020, consistently clearing and settling U.S. equities daily with participation from leading global financial institutions. Notably, a blockchain-based initiative with State Street in 2022 achieved same-day settlement for stock trades, known as "T+0." This registration comes at a time when established financial infrastructure providers are increasingly exploring tokenization, with the Depository Trust & Clearing Corporation announcing plans for its own tokenization service.
In addition to its clearing agency functions, Paxos is involved in issuing various digital assets, such as PayPal’s PYUSD stablecoin and Pax Gold (PAXG). The company also faced challenges last year when an internal error led to the accidental minting of 300 trillion PYUSD tokens, which were subsequently burned. Furthermore, Paxos received conditional approval to transition to an OCC national trust bank, allowing it to operate under a unified federal regulatory framework instead of a patchwork of state regulations.
