The U.S. Securities and Exchange Commission (SEC) has registered Paxos Securities Settlement Company (PSSC) as a clearing agency. This makes it the first blockchain organization in the country to achieve such status.
According to the press release, the license allows for clearing and settlement of transactions involving approved stocks as a central counterparty.
Paxos co-founder and CEO Charles Cascarilla noted that the company has been working towards this for seven years. Since 2019, the project has operated under a no-action letter from the regulator.
As part of a pilot program that began in February 2020, the company's infrastructure has been processing transactions of U.S. stocks daily for several major financial organizations. The testing confirmed the feasibility of same-day settlements, as well as the potential for reducing costs and operational risks.
The full registration removes the experimental status and allows Paxos to scale its services. The company plans to expand its infrastructure for partners involved with digital assets and the tokenization of traditional instruments.
Paxos counts giants like PayPal, Interactive Brokers, Mastercard, and Mercado Libre among its clients.
It’s worth noting that in April, the SEC eased requirements for self-custodial crypto wallets.