Key Takeaways:
The SEC has approved a blockchain-native firm to operate inside the core plumbing of US securities markets for the first time.
The US Securities and Exchange Commission granted Paxos Securities Settlement Company registration as a clearing agency under Section 17A of the Securities Exchange Act of 1934, making the stablecoin issuer the first blockchain-native firm authorized to clear and settle securities trades within regulated US market infrastructure.
"Our clearing agency registration is the result of seven years of work with the SEC, beginning with our No-Action Letter in 2019 and the settlement pilot we operated with some of the world's largest and most sophisticated financial institutions," Charles Cascarilla, co-founder and chief executive officer of Paxos, said.
The registration allows Paxos Securities Settlement Company to function as a central securities depository, handling ownership transfer, settlement timing and operational finality after a trade is executed. The SEC's order describes the approval as temporary registration, but the milestone places Paxos in a category occupied by traditional clearinghouses. The company's pilot, which began in February 2020 under SEC no-action relief, involved major global financial institutions and demonstrated that blockchain-based post-trade infrastructure could support same-day settlement at lower cost, Paxos said.
The approval arrives as tokenized securities, stablecoins and on-chain settlement tools move closer to the language of banks, brokers and public-market infrastructure providers. Paxos now has a regulated opening into the post-trade layer of US securities markets — a business that processes trillions of dollars in trades annually — and its platform is already used by companies including PayPal, Interactive Brokers and Mastercard.
The registration caps a regulatory journey that included significant friction with the SEC under former Chair Gary Gensler. Paxos received a Wells Notice in 2023 over its issuance of Binance USD, a stablecoin the SEC considered an unregistered security. The agency closed its investigation in 2024 without enforcement action. Paxos also reached a $48.5 million settlement with the New York Department of Financial Services in August 2025 over compliance issues related to Binance and BUSD.
The approval distinguishes Paxos from other crypto firms seeking to bridge blockchain technology with traditional finance. Unlike tokenization projects that operate outside regulated clearing infrastructure, Paxos Securities Settlement Company now sits inside the SEC's regulatory perimeter for post-trade services. The company issues three stablecoins — PayPal USD, Global Dollar and Pax Gold — giving it a suite of digital assets that could integrate with its settlement platform.
For Wall Street, the registration removes a key barrier to using blockchain-based settlement for securities trades. Banks and brokerages that have explored distributed ledger technology for back-office functions can now work with a SEC-registered clearing agency rather than unregulated alternatives. The development also pressures other crypto infrastructure firms to pursue similar regulatory approvals or risk losing institutional business to Paxos.
This article is for informational purposes only and does not constitute investment advice.
