The Securities and Exchange Commission has approved a Paxos subsidiary to clear and settle securities on a blockchain. The company, now registered as Paxos Securities Settlement Company (PSSC), will operate as a clearing agency under Section 17A of the Securities Exchange Act.
Paxos believes this makes it the only blockchain-native firm that the SEC has registered for this role. It says PSSC can now offer clearing and settlement services as a central securities depository in the United States.
Paxos is best known in crypto for powering stablecoins like PayPal’s PYUSD and running blockchain settlement pilots with major banks. However, this approval goes beyond those limited trials by bringing its securities platform fully under the SEC’s main rulebook. PSSC can now clear and settle transactions in eligible securities under ongoing regulatory oversight.
What the Approval Means for Banks, Brokers, and Fintechs
With its new status, PSSC can serve as a central securities depository, recording ownership and settling trades on a permissioned blockchain. Paxos says the system supports faster, same‑day settlement, lower operating costs, and greater post‑trade transparency. The firm also argues that a shared blockchain ledger reduces reconciliation work between brokers and custodians because everyone sees the same record.
Paxos called the registration “a critical piece of financial market infrastructure” as capital markets and blockchain continue to converge. PSSC says that, as a registered clearing agency, it can clear and settle trades in eligible securities. It claims this gives partners “the most complete infrastructure” to keep evolving with blockchain.
In practice, banks, brokerages, and fintech firms now have a fully regulated way to add blockchain-based settlement to their existing equity and bond workflows.
The decision caps several years of back‑and‑forth between Paxos and the SEC. In 2019, staff issued a no‑action letter allowing Paxos to conduct a limited “feasibility study” of its settlement service without registering as a clearing agency. That pilot supported same‑day settlement for a small set of liquid U.S. equities and a few large broker‑dealers.
Regulators have now decided the system can move from sandbox testing into the core of U.S. market plumbing. Paxos says the registered clearing agency can act as a “regulated foundation” for institutions. These firms can build blockchain-enabled market infrastructure on top of it.
The SEC has effectively “greenlit” a blockchain settlement service for public shares. That decision turns an experiment into live, supervised infrastructure.
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