Paxos Trust Company, a New York-regulated financial institution that digitises and mobilises assets, has announced it received No-Action relief from the staff of the US Securities and Exchange Commission (SEC) to introduce Paxos Settlement Service. Following the No-Action letter, the blockchain settlement platform will soon begin processing transactions for a limited number of broker-dealers for certain listed US equity securities.
Credit Suisse and Société Générale will be the first in a group of early adopters to use Paxos Settlement Service, settling US equities outside the legacy infrastructure for the first time in nearly half a century. The solution is designed to help clients achieve meaningful reductions in fees and gain access to capital otherwise trapped in the legacy settlement system.
Paxos Settlement Service is a private, permissioned blockchain solution designed to allow two parties to bilaterally settle securities trades directly with each other. The platform, which will be the first live application of blockchain technology for US equities, enables settlement of securities trades more cost-effectively and securely than the legacy system. It allows for the simultaneous exchange of cash and securities to settle trades and is backward-compatible with current processes, simplifying integration.
“The U.S. equities business continues to face unprecedented consolidation and economic pressures, requiring a comprehensive transformation of market structure," said Charles Cascarilla, CEO and co-founder of Paxos. "This is an important first step on our journey to reimagine the entire post-trade infrastructure, and one that creates immediate benefits for market participants.”
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