Overview
- Paxos Securities Settlement Company won temporary registration from the U.S. Securities and Exchange Commission on Thursday, authorizing it to provide clearing and settlement services as a central securities depository for eligible U.S. securities.
- The SEC order makes Paxos the first blockchain-native firm to reach clearing-agency status, moving the company from a multi-year pilot program into a regulated role in post-trade infrastructure.
- The registration is explicitly temporary, so Paxos must continue to meet SEC oversight and regulatory standards to retain and expand its clearing and settlement activities.
- Paxos’ path began with a 2019 SEC no-action letter and a February 2020 pilot that ran daily, on-chain settlements with large banks, a program the company says demonstrated same-day settlement and lower operational costs.
- If adopted by market participants, Paxos’ on-chain model could speed finality, cut counterparty risk and reduce capital needs for brokers and dealers, but it does not automatically replace incumbents like the DTCC or change market rules overnight.