USDPaxos Wins SEC Approval for Blockchain Stock Settlement
Registration gives Paxos a regulated role in U.S. equity clearing
TL;DR
- Paxos Securities Settlement Company received SEC registration to provide clearing and settlement services for U.S. securities.
- The approval was released on May 29, 2026, after a seven-year regulatory process that began with SEC no-action relief in 2019.
- The registration supports blockchain-based settlement for eligible U.S. equities, including same-day T+0 settlement.
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Paxos Securities Settlement Company, LLC received full registration from the U.S. Securities and Exchange Commission to provide clearing and settlement services for U.S. securities, giving Paxos a regulated path to clear and settle eligible U.S. equities on blockchain infrastructure after years of operating under a limited SEC framework.
The approval was released on May 29, 2026. The SEC response referenced in the approval process was dated March 11, and the regulatory track began with SEC no-action relief in 2019.
Paxos described the approval as a historic milestone because Paxos Securities Settlement Company became the first blockchain firm authorized to operate as a central securities depository for traditional equities in the United States. The registration places Paxos beside legacy post-trade infrastructure providers such as the Depository Trust & Clearing Corporation.
Paxos moves from pilot to full registration
Paxos began operating a live settlement pilot in February 2020 after receiving SEC no-action relief in 2019. The pilot tested blockchain-based clearing and settlement for U.S. equities in an institutional environment and involved major traditional finance participants.
Bank of America, Credit Suisse, and Societe Generale were named as participants connected to daily U.S. equities settlement activity. Paxos also had been clearing and settling U.S. equities daily since February 2020 for major global broker-dealers including Credit Suisse, Instinet, and Société Générale.
Charles Cascarilla, the chief executive officer and co-founder of Paxos, said the registration followed a long regulatory process. “Our clearing agency registration is the result of seven years of work with the SEC, beginning with our No-Action Letter in 2019 and the settlement pilot we operated with some of the world’s largest and most sophisticated financial institutions.”
Cascarilla also said the registration allows Paxos to offer “the most complete infrastructure” for financial partners looking to evolve with blockchain-enabled technology. The approval moved Paxos from no-action relief, to live pilot operations, to full clearing agency registration.
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Approval targets settlement speed and capital efficiency
The registration allows Paxos to provide delivery versus payment clearance and settlement services for eligible U.S. equities. That means asset transfer and payment settlement can be coordinated through the same regulated infrastructure.
The approval targets a core post-trade market bottleneck: trades can execute quickly, but final settlement still depends on centralized clearing infrastructure and delayed post-trade processing. Paxos’ new status could allow eligible securities to settle same day or nearly instantly.
The milestone enables same-day T+0 settlement for U.S. equities. The U.S. equity market moved to a T+1 settlement cycle in 2024, meaning most stock trades settle one business day after execution.
The practical effect is capital efficiency. Same-day or near-instant on-chain settlement could reduce capital tied up during the settlement process. The model could also reduce counterparty risk and trapped collateral.
Paxos expands beyond stablecoin infrastructure
Paxos already holds regulatory licenses from the Office of the Comptroller of the Currency in the U.S., Singapore’s Monetary Authority of Singapore, and Europe’s FIN-FSA. Paxos is also prudentially regulated by the New York Department of Financial Services.
The approval expands Paxos’ institutional role from stablecoin infrastructure into regulated securities market infrastructure. Paxos already provides white-label infrastructure tools used by PayPal and Mastercard, and serves as infrastructure backbone for stablecoins used by Paypal and Mastercard.
The new clearing agency designation could allow Paxos to combine regulated stock clearing with its existing infrastructure products. It also supports the company’s broader strategy around institutional tokenization of real-world assets, especially where traditional equities and digital asset rails overlap.
The SEC’s decision removes a regulatory bottleneck for Paxos’ tokenization strategy. The approval gives market participants a pipeline to clear and settle digital asset trades involving traditional equities, based on the SEC’s March 11 response to Paxos.
The approval also creates direct competition with legacy clearinghouses because Paxos can now offer blockchain-native settlement for eligible U.S. equities inside a regulated clearing agency structure. Legacy infrastructure providers now face direct blockchain competition after Paxos’ seven-year effort resulted in registered clearing agency approval.
The broader policy significance is that blockchain settlement is entering a supervised institutional framework. The SEC has historically used enforcement against digital asset exchanges and DeFi protocols, while this approval shows growing willingness to integrate distributed ledger systems into supervised market infrastructure.
Demand from major banks to tokenize real-world assets and streamline legacy operations is described as accelerating rapidly. Paxos’ approval gives the company a stronger role in that institutional tokenization race because tokenized equities and real-world assets require clearing, custody, settlement, and compliance rails before major banks can deploy them at scale.
FAQ
What did Paxos receive from the SEC?
Full registration to provide clearing and settlement services for U.S. securities.
What settlement model does the approval support?
Same-day T+0 settlement for eligible U.S. equities.
When did Paxos begin its settlement pilot?
Paxos began the live settlement pilot in February 2020.
This article has been refined and enhanced by ChatGPT.
