Paxos becomes first blockchain firm with SEC clearing agency registration
Paxos Securities Settlement Company (PSSC), a subsidiary of Paxos, has received clearing agency registration from the U.S. Securities and Exchange Commission (SEC).
According to the company’s website, this status allows PSSC to provide clearing and settlement services for eligible securities transactions. The company said it became the first and only blockchain firm to receive such approval from the SEC.
“Clearing agency registration is the result of seven years of work with the SEC,” said Paxos CEO and co-founder Charles Cascarilla. According to him, the status will allow the company to offer partners more complete infrastructure to evolve alongside the market and blockchain technology.
A long path to legalization
Paxos noted that since 2020 it has been running pilot projects for clearing and settlement of U.S. equities with major global financial institutions. These projects were conducted under the SEC’s no-action relief framework. According to the company, the tests showed that blockchain-based post-trade infrastructure can improve efficiency through same-day settlement and lower costs.
Paxos believes the SEC approval has become an important piece of financial market infrastructure as blockchain technology and traditional capital markets continue to converge.
Paxos already works with companies such as PayPal, Interactive Brokers, Mastercard and Mercado Libre. The company also issues several stablecoins and tokenized assets, including PayPal USD (PYUSD) and Pax Gold.
What is clearing?
In regular securities trading, a transaction does not end when an investor clicks “buy” or “sell.” After that, the technical part begins: data must be matched, obligations between the parties confirmed, and the transfer of money and assets arranged. Retail investors usually do not see this part of the market, but trading in stocks, bonds and other instruments cannot function without it.
That is what clearing agencies do. They help market participants safely move trades through to settlement and reduce the risk of failures. For Paxos, SEC registration is important because the company can now offer this infrastructure in a regulated environment while using blockchain. In theory, this could speed up settlement, reduce costs and bring post-trade processes closer to how modern digital markets work.
As a reminder, Paxos sees the stablecoin market as a promising area for the banking sector.
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