The US Securities and Exchange Commission (SEC) has registered Paxos Securities Settlement Company (PSSC) as a clearing agency — parent company Paxos announced the regulator’s decision on May 28.
The approval was granted under Section 17A of the Securities Exchange Act of 1934, and for the first time it gives a blockchain firm the right to clear and settle transactions as a central securities depository in the country.
The Result of Seven Years of Talks with the Regulator
Paxos CEO and co-founder Charles Cascarilla traces this approval back to 2019, when the company received a no-action letter from the SEC and then launched a settlement pilot involving the world’s largest financial institutions.
“Registration opens up the opportunity for PSSC to service transactions in eligible securities and gives the company’s partners a complete infrastructure to operate alongside an evolving market,” he said.
The new status builds on years of live operations: since February 2020, Paxos — operating under the regulator’s relief — has cleared and settled US equities on a daily basis with the involvement of leading global financial organizations. This track record confirmed that a blockchain-based post-trade system enables same-day settlement, lowers costs, and improves operational efficiency within a fully regulated framework.
What Changes for the Platform
The new status broadens what the platform can do — one on which global companies already issue and scale digital-asset products. Within Paxos, the PSSC approval is described as a meaningful piece of the market infrastructure that is taking shape as blockchain converges with traditional capital markets.
Oversight of Paxos is carried out by the OCC in the US, the FIN-FSA in Europe, and the MAS in Singapore. The company issues a range of digital assets, among them PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG). It also works with PayPal, Interactive Brokers, Mastercard, and Mercado Libre, and has raised more than $500 M from investors such as Oak HC/FT, Declaration Partners, Founders Fund, and PayPal Ventures.