Key Takeaways
- • Paxos Securities Settlement Company (PSSC) becomes the first and only blockchain-native firm registered as a clearing agency by the SEC under Section 17A of the Securities Exchange Act of 1934, as of May 28, 2026.
- • The registration enables PSSC to provide clearing and settlement services as a central securities depository for eligible securities transactions in the United States, representing a convergence point between blockchain technology and traditional capital market infrastructure.
- • Paxos achieved this milestone following seven years of regulatory engagement with the SEC, including a No-Action Letter in 2019 and a settlement pilot program operated since February 2020 with participation from major global financial institutions clearing U.S. equities on a daily basis.
- • The approval positions Paxos as the exclusive regulated blockchain-native infrastructure provider for clearing and settlement in the U.S., providing institutional participants with a complete ecosystem for evolving market participation alongside blockchain technology adoption.
Summary
Paxos has achieved a significant regulatory milestone with SEC approval of its subsidiary, Paxos Securities Settlement Company LLC (PSSC), as a registered clearing agency—making it the first and only blockchain-native firm to receive this designation in the United States. The approval, announced on May 28, 2026, grants PSSC registration under Section 17A of the Securities Exchange Act of 1934 to operate as a central securities depository providing clearing and settlement services for eligible securities transactions.
The registration represents the culmination of an extended regulatory engagement process. Charles Cascarilla, CEO and Co-Founder of Paxos, emphasized that the approval followed "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." This phased approach allowed the SEC to evaluate Paxos' operational capabilities and risk management frameworks under real-market conditions before granting full registration.
Paxos has demonstrated operational capability over multiple years. The firm began operating under SEC no-action relief in February 2020, clearing and settling U.S. equities transactions on a daily basis with participation from top-tier global financial institutions. This extended pilot period provided both regulatory authorities and market participants with empirical evidence of the platform's reliability and compliance with market structure requirements.
The approval carries strategic implications for institutional market participants. PSSC's registration status enables Paxos to offer institutional clients a complete infrastructure solution for capital markets operations incorporating blockchain technology. According to Paxos, the clearing agency status "allows us to offer the most complete infrastructure for our partners to continue evolving with the market and blockchain technology," positioning the platform at the intersection of traditional securities settlement and digital asset infrastructure development.
The regulatory recognition of blockchain-native clearing infrastructure marks a meaningful validation of the technology's application to core financial market functions, with potential implications for future market structure evolution as institutional adoption of blockchain-based settlement continues.
The registration represents the culmination of an extended regulatory engagement process. Charles Cascarilla, CEO and Co-Founder of Paxos, emphasized that the approval followed "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." This phased approach allowed the SEC to evaluate Paxos' operational capabilities and risk management frameworks under real-market conditions before granting full registration.
Paxos has demonstrated operational capability over multiple years. The firm began operating under SEC no-action relief in February 2020, clearing and settling U.S. equities transactions on a daily basis with participation from top-tier global financial institutions. This extended pilot period provided both regulatory authorities and market participants with empirical evidence of the platform's reliability and compliance with market structure requirements.
The approval carries strategic implications for institutional market participants. PSSC's registration status enables Paxos to offer institutional clients a complete infrastructure solution for capital markets operations incorporating blockchain technology. According to Paxos, the clearing agency status "allows us to offer the most complete infrastructure for our partners to continue evolving with the market and blockchain technology," positioning the platform at the intersection of traditional securities settlement and digital asset infrastructure development.
The regulatory recognition of blockchain-native clearing infrastructure marks a meaningful validation of the technology's application to core financial market functions, with potential implications for future market structure evolution as institutional adoption of blockchain-based settlement continues.
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