Paxos Securities Settlement Company, LLC has received full registration from the U.S. Securities and Exchange Commission to operate as a central securities depository for U.S. equities, marking the first time a blockchain firm has been authorized to provide clearing and settlement services for traditional stock trades in the country.
The approval, confirmed in an SEC response dated March 11, positions Paxos’ subsidiary alongside legacy post-trade infrastructure operators like the Depository Trust and Clearing Corporation (DTCC), which has dominated U.S. equity settlement for decades. PSSC can now settle eligible securities on a same-day or nearly instant basis, eliminating the traditional settlement window that has constrained capital efficiency in equity markets.
The regulatory milestone caps a seven-year effort. The SEC first granted Paxos no-action relief in 2019, permitting the company to launch a live settlement pilot in February 2020. The approval comes as U.S. equity markets operate under a T+1 settlement cycle, a standard adopted in 2024 that shortened settlement from two business days to one. PSSC’s blockchain-based infrastructure can compress settlement further.
Traditional stock trades execute in milliseconds on electronic exchanges, but final settlement has remained trapped in centralized clearing houses, creating structural delays, trapped collateral, and counterparty risks. Paxos’ authorization allows it to settle transactions directly on blockchain infrastructure, bypassing these bottlenecks for participating brokers and asset managers.
Paxos already holds licenses from the U.S. Office of the Comptroller of the Currency, Singapore’s Monetary Authority of Singapore, and Europe’s FIN-FSA, signaling regulatory acceptance across multiple jurisdictions. The company operates white-label settlement and custody infrastructure used by PayPal and Mastercard, demonstrating demand for blockchain-based post-trade services beyond traditional finance.
The approval does not specify which equities or asset classes PSSC is authorized to clear, nor does it detail the technical mechanism of the blockchain settlement rail or which blockchain network Paxos will deploy. The company has not yet disclosed a public statement on the registration.
What This Means
PSSC’s registration removes a regulatory barrier that has confined blockchain settlement to experimental pilots and limited-scale deployments. Equities can now settle on blockchain infrastructure operated by a federally registered entity, creating a legal pathway for institutional adoption. Whether major brokers and custodians integrate PSSC’s services depends on operational incentives, technical compatibility, and competitive pricing relative to DTCC’s entrenched market position.
