SEC Grants Paxos Clearing Agency Status for Blockchain-Based Securities Settlement

Blockchain infrastructure company Paxos has reached a major regulatory milestone after its subsidiary, Paxos Securities Settlement Company, received registration from the U.S. Securities and Exchange Commission as a clearing agency under Section 17A of the Securities Exchange Act.

With the approval, Paxos said it has become the first blockchain-native company authorized by the SEC to operate clearing and settlement infrastructure as a central securities depository in the United States. The registration enables the firm to continue providing blockchain-based post-trade services while complying with ongoing regulatory oversight requirements.

According to the SEC order, the authorization has been granted on a temporary basis, allowing the company to expand its clearing and settlement operations as it continues to satisfy regulatory standards. Paxos CEO and co-founder Charles Cascarilla described the approval as a significant achievement for the firm and its partners seeking modernized market infrastructure built on blockchain technology.

Cascarilla noted that the registration concludes a multi-year regulatory effort that began with the company securing SEC no-action relief in 2019. Since launching its settlement pilot in early 2020, Paxos has facilitated daily clearing and settlement of U.S. equities with participation from several large financial institutions.

The company also highlighted its earlier collaboration with State Street, which demonstrated same-day, or T+0, settlement capabilities for stock trades using blockchain technology in 2022. The initiative showcased how distributed ledger systems could reduce settlement delays and improve efficiency in traditional financial markets.

Paxos’ approval arrives as tokenization continues gaining momentum across Wall Street. Major financial infrastructure providers have increasingly explored blockchain-powered settlement systems and tokenized assets as institutions look to modernize capital markets operations.

Beyond settlement services, Paxos is also known for issuing digital assets such as PayPal’s PYUSD stablecoin and the gold-backed cryptocurrency PAXG. The company has continued expanding its regulated financial services footprint following conditional approval from the Office of the Comptroller of the Currency to become a national trust bank, a move aimed at streamlining its regulatory framework under federal supervision.