CoinDesk
Paxos Securities Settlement Company (PSSC), a subsidiary of stablecoin issuer Paxos, has received full SEC registration to provide clearing and settlement services for U.S. equities — making it the first blockchain firm authorized to operate as a central securities depository (CSD) for traditional stocks in the United States, alongside legacy giants like the Depository Trust & Clearing Corporation (DTCC).
The green light, formalized in an SEC response to Paxos on March 11, clears a regulatory bottleneck for the firm's institutional tokenization roadmap and lets it settle eligible securities on a same-day or near-instant basis using blockchain as the clearing rail, bypassing the multi-day plumbing that still constrains the $25 trillion U.S. equity market.
Why it matters
The registration positions Paxos as a credible, more efficient alternative to legacy post-trade infrastructure, with PSSC able to bundle regulated stock clearing into the same white-label stack it already runs for PayPal and Mastercard. Paxos also holds licenses from the OCC, Singapore's MAS, and Finland's FIN-FSA — a multi-jurisdictional footprint that gives the firm a regulatory head start over newer entrants chasing the same RWA-on-chain thesis.
The move follows Paxos's 2019 SEC no-action relief and a live settlement pilot launched in February 2020 that onboarded Bank of America, Credit Suisse and Société Générale to clear daily U.S. equity transactions — six years of supervised operation that paved the way for the full CSD designation.
Market impact
The structural read is the capital-efficiency angle: even after the U.S. moved to T+1 settlement in 2024, the underlying plumbing still traps collateral and layers counterparty risk. If PSSC can compress that to near-instant finality at institutional scale, it pressures the legacy T+1 economics of every incumbent post-trade venue and opens a competitive lane for tokenized real-world assets to clear through a regulated CSD rather than bespoke bilateral setups.
Frequently asked questions
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What did the SEC actually approve Paxos to do?
Paxos Securities Settlement Company (PSSC) received full SEC registration to provide clearing and settlement services for U.S. equities, becoming the first blockchain firm authorized to operate as a central securities depository (CSD) in the U.S., alongside the DTCC.
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How does blockchain clearing differ from the current T+1 settlement cycle?
U.S. equity markets moved to T+1 (one business day) in 2024, but the underlying plumbing still involves multi-day post-trade processing, trapped collateral and counterparty risk. PSSC can settle eligible securities on a same-day or near-instant basis using blockchain as the clearing rail.
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What other regulatory licenses does Paxos already hold?
Paxos is already licensed by the U.S. OCC, Singapore's MAS, and Finland's FIN-FSA. The new SEC CSD registration adds U.S. securities clearing to a multi-jurisdictional footprint that gives the firm a head start over newer tokenization entrants.
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Why does this matter for real-world asset (RWA) tokenization?
A regulated blockchain-native CSD gives tokenized RWAs a compliant clearing path for underlying traditional equities, rather than relying on bespoke bilateral setups. That removes a major bottleneck for institutions wanting to bring on-chain assets into the same clearing rails as legacy stocks.
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What is the proof point that this isn't just a regulatory trophy?
The PSSC pilot launched in February 2020 under SEC no-action relief already onboarded Bank of America, Credit Suisse and Société Générale to clear daily U.S. equity transactions. The next milestone is which tier-one bank routes production equity volume through PSSC at scale.
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