SEC Registers Paxos Clearing Company

The U.S. Securities and Exchange Commission (SEC) has officially registered Paxos Securities Settlement Company (PSSC) as a clearing agency, marking a significant milestone as it becomes the first blockchain entity to gain such recognition in the United States.

This registration enables PSSC to facilitate the clearing and settlement of transactions involving authorized stocks as a central counterparty. According to Paxos co-founder and CEO Charles Cascarilla, the company has dedicated seven years to achieving this goal, operating under a no-action letter from the SEC since 2019.

Since February 2020, Paxos has been part of a pilot program that has successfully processed daily transactions for U.S. stocks on behalf of several major financial institutions. This testing phase demonstrated the viability of same-day settlements and highlighted opportunities to lower costs and mitigate operational risks.

With the full registration, Paxos can now move beyond its experimental phase and scale its services more effectively. The company aims to enhance its infrastructure to support partners engaged in digital assets and the tokenization of conventional financial instruments.

Paxos has established a client base that includes prominent names such as PayPal, Interactive Brokers, Mastercard, and Mercado Libre. Furthermore, it is noteworthy that the SEC relaxed regulations earlier this year concerning self-custodial crypto wallets.