Paxos Securities Settlement Company, LLC (PSSC) has received full registration to provide clearing and settlement services by the U.S. Securities and Exchange Commission (SEC).
Stablecoin issuer Paxos said the regulatory milestone makes its subsidiary the first blockchain company authorized to operate as a central securities depository (CSD) for traditional equities in the US, positioning it alongside legacy post-trade frameworks such as the Depository Trust & Clearing Corporation (DTCC).
The approval removes a bottleneck for Paxos’ goals for institutional tokenization of real-world assets (RWA), providing market participants with a channel 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 the OCC in the US, MAS from Singapore and FIN-FSA from Europe. 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 first granted Paxos no-action relief in 2019, allowing the firm to develop a live settlement pilot in February 2020, allowing it to integrate traditional finance (TradFi) giants such as Bank of America, Credit Suisse and Societe Generale to settle daily transitions of US stocks.
Paxo’s new registered status allows it to bypass legacy settlement infrastructure entirely. With blockchain as a clearing avenue, PSSC can settle eligible securities on the same day or almost instantaneously, eliminating the traditional settlement window and freeing up locked capital for institutional participants.
In traditional capital markets, stock trades are executed in milliseconds, but final settlement, the actual exchange of cash for legal ownership of assets, is processed through a centralized clearinghouse, typically the DTCC.
While U.S. equity markets transitioned to a standard T+1 (one business day) settlement cycle in 2024, the legacy financial system remains constrained by structural delays, trapped collateral, and counterparty risks.
