The U.S. Securities and Exchange Commission has approved Paxos subsidiary Paxos Securities Settlement Company as a clearing agency, making the firm the first blockchain-native entity authorized to provide central securities depository services in the country. The registration allows Paxos to offer clearing and settlement for securities transactions under SEC oversight, giving traditional financial institutions a regulated path to use blockchain for post-trade operations.
Seven-Year Regulatory Journey to Approval
Charles Cascarilla, co-founder and CEO of Paxos, stated the registration is the result of seven years working with the SEC, starting with a No-Action Letter in 2019 and a settlement pilot operated with major financial institutions. The pilot, launched in February 2020, demonstrated that blockchain infrastructure could support same-day settlement while reducing costs and improving efficiency within existing rules.
The path was not smooth. In 2023, the SEC issued a Wells Notice to Paxos regarding Binance USD (BUSD), a stablecoin created with Binance, viewing it as a potential unregistered security. The New York Department of Financial Services also ordered Paxos to stop minting new BUSD tokens. The following year, the SEC closed its investigation without enforcement. In August 2025, Paxos reached a $48.5 million settlement with NYDFS over compliance issues tied to Binance and BUSD. The clearing agency approval marks a new chapter in regulatory relations.
Expanding Infrastructure: Stablecoins to Enterprise Services
Paxos operates digital asset products including PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG). In April 2026, Paxos Labs, a spin-off led by Cascarilla, raised $12 million from investors such as Blockchain Capital, Robot Ventures, Maelstrom, and Uniswap Labs. Paxos Labs develops technology for large enterprises to launch branded stablecoins and integrate programmable payment systems into corporate operations.
As financial institutions explore tokenized money and blockchain settlement, Paxos says its newly approved clearing agency can serve as a regulated foundation for banks and brokerages seeking to build blockchain-enabled market infrastructure. Clearing agencies sit between buyers and sellers, verifying trades, matching counterparties, and ensuring correct exchange of cash and securities upon transaction completion.