Paxos Secures SEC Approval for Blockchain Settlement Business
Paxos has received a key regulatory approval from the U.S. Securities and Exchange Commission (SEC), marking a major step in its efforts to bring blockchain technology into traditional securities markets.
The company announced that its subsidiary, Paxos Securities Settlement Company LLC, has been registered as a clearing agency under Section 17A of the Securities Exchange Act of 1934. While the SEC granted the registration on a temporary basis, the approval places Paxos among a small group of blockchain-focused firms operating within regulated U.S. market infrastructure.
The registration allows Paxos to provide clearing and settlement services for eligible securities as a central securities depository. This means the company can play a larger role in the post-trade process, including managing ownership transfers, settlement operations and the final completion of securities transactions.
Paxos said the approval builds on years of engagement with regulators. According to CEO and co-founder Charles Cascarilla, the registration is the result of seven years of work with the SEC, beginning with a no-action letter in 2019 and followed by a blockchain-based settlement pilot involving major financial institutions.
Launched in 2020 under SEC no-action relief, the pilot enabled Paxos to clear and settle U.S. equities using blockchain technology. The company said the initiative demonstrated that blockchain-based infrastructure could support faster settlement, lower operating costs and greater efficiency while meeting regulatory requirements.
The approval comes as tokenized securities, stablecoins and blockchain-powered settlement systems gain traction across the financial industry. Banks, brokers and market operators are increasingly exploring digital asset infrastructure to modernize capital markets.
For Paxos, the registration strengthens its position as a regulated provider of blockchain-based financial infrastructure. The company already works with major financial firms, including PayPal, Interactive Brokers and Mastercard.
With SEC approval in hand, Paxos now has a pathway into one of the most critical layers of securities trading, positioning the company to benefit as financial markets increasingly adopt blockchain technology.
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