Paxos subsidiary Paxos Securities Settlement Company has obtained registration as a clearing agency with the U.S. Securities and Exchange Commission (SEC), becoming the first blockchain-native central securities depository (CSD) to operate under SEC oversight.
This low-key registration marks a shift on Wall Street: interest in blockchain has moved from "buying crypto" to "rebuilding post-trade infrastructure."
From 2019 No-Action Letter to Full Registration
Stock trades are not straight handoffs between buyer and seller. Behind each transaction, clearing agencies verify, match trades, and ensure funds and securities are exchanged. Traditionally, the National Securities Clearing Corporation (NSCC) and Depository Trust Company (DTC) handle these roles. Now Paxos can legally serve as a blockchain-based "gatekeeper" for trade settlement.
Paxos co-founder and CEO Charles Cascarilla called the registration the culmination of seven years of work. It began with an SEC no-action letter in October 2019, followed by a blockchain settlement pilot in February 2020, conducted with multiple top-tier global financial institutions. The pilot demonstrated that blockchain-based post-trade infrastructure can achieve same-day settlement, reduce operational costs, and improve efficiency—all within a regulatory framework.
Dual Track: Settlement and Stablecoins
Beyond clearing, Paxos issues several stablecoins: PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG). The clearing registration adds an official endorsement to stablecoins' daily functions—moving funds and swapping assets. It lowers the barrier for banks and brokerages to build crypto infrastructure.
Paxos's relationship with the SEC has not always been smooth. In 2023, the firm received a Wells Notice alleging unregistered securities issuance of Binance USD (BUSD). The SEC closed its investigation in 2024 and issued a termination notice. In August 2025, Paxos also reached a $48.5 million settlement with the New York Department of Financial Services (NYDFS).
Now, with its clearing registration, Paxos shows Wall Street that blockchain is not just on whiteboards—it is handling real post-trade operations.
Implications for Markets
Taiwan's stock market, for example, currently settles through its central securities depository (TWSP) under a T+2 regime (shortened to T+1 from March 2026). Paxos's registration demonstrates that blockchain can operate on T+1 or even T+0. If Taiwan follows suit, its central securities depository could face competition from blockchain-native players. Paxos's path as a CSD suggests that more blockchain clearing agencies may emerge, potentially making T+0 settlement a practical alternative to T+1.