Paxos Makes History with Blockchain Clearing Agency Registration

Paxos Securities Settlement Company has made history by becoming the first blockchain-native firm to earn registration as a clearing agency in the United States. This achievement is seen as a significant milestone in the adoption of blockchain technology in traditional finance.

The company's journey to this point was seven years in the making, starting with a no-action letter from the SEC in 2019 that allowed Paxos to pilot blockchain-based settlement for US equities. Since then, Paxos has made steady progress, including converting its trust arm to a national trust charter supervised by the Office of the Comptroller of the Currency.

The registration of PSSC as a clearing agency under Section 17A of the Securities Exchange Act means that it will be subject to the same regulatory framework as legacy clearinghouses. However, it also represents an opportunity for Paxos to provide faster, cheaper settlement options to broker-dealers and their clients.