SEC Approves Paxos as First Blockchain-Native Clearing Agency

• The SEC has granted Paxos’ subsidiary, Paxos Securities Settlement Company (PSSC), registration as a clearing agency under Section 17A of the Securities Exchange Act of 1934.
• The approval makes PSSC the only blockchain-native firm cleared to provide settlement services as a central securities depository in the United States, capping a seven-year process that began with a 2019 no-action letter.
• The registration positions Paxos inside the regulated post-trade infrastructure long dominated by the Depository Trust & Clearing Corporation, as tokenized securities move toward mainstream capital markets.

Paxos said on Thursday that the U.S. Securities and Exchange Commission has granted its subsidiary registration as a clearing agency, making the Paxos SEC clearing agency approval the first of its kind for a blockchain-native firm operating as a central securities depository in the United States. The company announced that Paxos Securities Settlement Company, LLC (PSSC) received the registration under Section 17A of the Securities Exchange Act of 1934.

The clearance places Paxos inside the regulated back-office systems that handle ownership transfer and settlement after a trade executes, a territory long held by the Depository Trust & Clearing Corporation. The approval lands as tokenized stocks, bonds, and on-chain settlement tools edge closer to the infrastructure used by banks, brokers, and public-market venues. Paxos filed its application with the SEC in August 2025, and the regulator opened the request to public comment before deciding whether to grant it.

“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,” said Charles Cascarilla, CEO and co-founder of Paxos. “As a registered clearing agency, PSSC is able to provide clearing and settlement services for transactions in eligible securities.”

The registration builds on a live track record rather than a fresh experiment. Beginning in February 2020, under SEC no-action relief, Paxos cleared and settled U.S. equities daily with participation from top global financial institutions. The company said that work showed blockchain-based post-trade infrastructure could deliver same-day settlement, cut costs, and improve operational efficiency within a regulated framework.

The SEC’s order describes the approval as a temporary registration, according to reporting on the order, a common step for new market-infrastructure entrants. The qualifier does little to dull the milestone, since few firms of any kind hold active clearing-agency status alongside incumbents like DTCC.

Paxos already supplies tokenization, custody, and stablecoin infrastructure to enterprises, including PayPal, Interactive Brokers, and Mastercard, and it issues PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG). Cascarilla framed the registration as the missing piece that lets partners settle tokenized assets end-to-end. Whether competitors follow Paxos through the same regulatory door will signal how quickly blockchain settlement moves from pilot to standard market plumbing.

Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.

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