Paxos Securities Settlement Company, LLC (PSSC) has received full registration to provide clearing and settlement services by the US Securities and Exchange Commission (SEC).
Stablecoin issuer Paxos said the regulatory milestone makes its subsidiary the first blockchain firm authorized to act as a central securities depository (CSD) for traditional stocks in the US, placing it alongside legacy post-trade frameworks such as the Depository Trust & Clearing Corporation (DTCC).
The approval removes a bottleneck for Paxos’ goal of institutional tokenization of real-world assets (RWAs), giving market participants a pipeline to clear and settle digital asset trades involving traditional stocks, according to the SEC’s March 11 response to Paxos.
Paxos, which already has licenses from the OCC in the US, Singapore’s MAS and Europe’s FIN-FSA. said the central clearinghouse designation also allows it to bundle regulated equity clearing with its existing white-label infrastructure tools used by PayPal and Mastercard.
The SEC granted Paxos initial exemption in 2019, allowing the firm to develop a live settlement pilot in February 2020 that allowed it to integrate traditional finance giants (TradFi) such as Bank of America, Credit Suisse and Societe Generale to handle daily US stock exchanges.
Paxo’s newly registered status makes it possible to bypass the old settlement infrastructure entirely. With blockchain as the clearing rail, PSSC can settle eligible securities on the same day or almost instantly, eliminating the traditional settlement window and freeing up locked-up capital for institutional participants.
In traditional capital markets, equity trades are executed in milliseconds, but the final settlement, the actual exchange of cash for legal asset ownership, is processed through a centralized clearing house, typically DTCC.
While US equity markets transitioned to a T+1 (one business day) default settlement cycle in 2024, legacy financial plumbing remains limited to structural delays, locked-in collateral and counterparty risks.
