Paxos Trust Company, a New York-regulated financial institution that digitises and mobilises assets, has announced it has launched the Paxos Settlement Service. The service can now settle select US listed equity trades between broker-dealers Credit Suisse and Instinet.
Paxos Settlement Service is a private, permissioned blockchain solution designed to allow two parties to bilaterally settle securities trades directly with each other. Now operational, the service represents the first live application of blockchain technology for listed US equities. Paxos launched the service under No-Action relief from the staff of the US Securities and Exchange Commission (SEC). In launching the service with Credit Suisse and Instinet, Paxos is allowing for the simultaneous exchange of cash and securities to settle trades. A third participant, Société Générale, will soon also begin settling US listed equities trades with Paxos Settlement Service.
Additionally, Paxos announced that it will submit its application for clearing agency registration with the SEC in 2020 so that it can offer the Paxos Settlement Service to all street side broker-dealers to settle US listed equities.
“Launching Paxos Settlement Service under No-Action relief is the first step in our journey to transform post-trade infrastructure in the securities industry," said Charles Cascarilla, CEO and co-founder of Paxos. "We’ve worked closely with Credit Suisse and Instinet to build a solution that can deliver long-term cost benefits and together we will refine the system in a live environment. Our upcoming application for clearing agency registration demonstrates our dedication to modernising market structure on a large scale.”
“The initiative has the potential to deliver great efficiency and cost savings to the post-trade cycle," added Emmanuel Aidoo, head of Digital Asset Markets at Credit Suisse. "Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes.”
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