Paxos Securities Settlement Company, LLC (PSSC) has received full registration to provide clearing and settlement services with the United States Securities and Exchange Commission (SEC).
Stablecoin issuer Paxos said this regulatory step makes its subsidiary the first blockchain company authorized to operate as a central securities depository (CSD) for traditional equities in the United States, positioning it alongside traditional post-trade frameworks such as the Depository Trust & Clearing Corporation (DTCC).
The approval eliminates a bottleneck for Paxos’ goals for institutional tokenization of real-world assets (RWA), providing market participants with a pipeline to clear and settle digital asset transactions involving traditional stocks, according to the SEC’s response to Paxos on March 11.
Paxos, which already holds licenses from OCC in the United States, MAS in Singapore and FIN-FSA in Europe. said the clearinghouse designation also allows it to consolidate regulated equity clearing with its existing white-label infrastructure tools used by PayPal and Mastercard.
The SEC first granted a waiver of inaction to Paxos in 2019, allowing the company to develop a live settlement pilot in February 2020, which allowed it to integrate traditional finance (TradFi) giants such as Bank of America, Credit Suisse and Société Générale to clear daily transitions on US stocks.
Paxo’s newly registered status allows it to completely bypass existing settlement infrastructure. With blockchain as the clearing rail, PSSC can settle eligible securities same-day or near instantaneously, eliminating the traditional settlement window and freeing up stranded capital for institutional participants.
In traditional capital markets, stock trades execute in milliseconds, but final settlement, the actual exchange of cash for legal ownership of assets, is processed by a centralized clearinghouse, typically DTCC.
As US equity markets have moved to a standard T+1 (one business day) settlement cycle in 2024, traditional financial plumbing remains limited to structural delays, trapped collateral and counterparty risks.
