Paxos-backed settlement arm wins SEC clearing-agency registration, stakes claim as a blockchain-native depository Paxos Securities Settlement Company, a subsidiary of blockchain infrastructure firm Paxos, has secured registration from the U.S. Securities and Exchange Commission as a clearing agency under Section 17A of the Securities Exchange Act. In a company announcement, Paxos said the registration makes it the “only blockchain-native firm” approved by the SEC to operate as a central securities depository in the United States. What the registration means The SEC’s order is a temporary registration that permits Paxos to provide clearing and settlement services while it continues to satisfy ongoing regulatory requirements. In practical terms, registration under Section 17A allows a firm to run the infrastructure that finalizes trades and holds securities—functions long handled by legacy central securities depositories (CSDs) and clearinghouses. “Most importantly, it allows us to offer the most complete infrastructure for our partners to continue evolving with the market and blockchain technology,” Paxos CEO and co-founder Charles Cascarilla said in a statement. A seven-year regulatory push The approval caps a multi-year effort by Paxos to integrate distributed-ledger technology with mainstream securities infrastructure. Cascarilla framed the milestone as the culmination of a seven-year regulatory journey that began with a 2019 No-Action Letter and continued through a settlement pilot that the firm ran with major financial institutions. That pilot—launched in February 2020 under SEC no-action relief—has been clearing and settling U.S. equities on a daily basis with participation from what Paxos describes as “top global financial institutions.” A later blockchain-based pilot with State Street in 2022 demonstrated same-day settlement (T+0) for stock trades, a capability proponents say can reduce counterparty risk and free up capital. Context: tokenization and legacy players Paxos’ registration arrives as incumbents in post-trade infrastructure move toward tokenized securities. The Depository Trust & Clearing Corporation (DTCC), for example, has disclosed plans for its own tokenization service backed by major Wall Street firms—an indicator that tokenized settlement is becoming a mainstream priority for institutional market plumbing. Paxos’ digital-asset footprint and regulatory history Paxos issues several well-known digital assets, including PayPal’s PYUSD stablecoin and the gold-backed Pax Gold (PAXG). The firm has also faced operational and regulatory scrutiny: in October 2025, Paxos said an “internal technical error” led it to accidentally mint and then burn 300 trillion PYUSD tokens. Months after that incident, Paxos received conditional approval to convert to an OCC national trust bank, a move intended to allow the company to operate under a unified federal regulatory framework rather than a patchwork of state rules. Why this matters SEC registration as a clearing agency gives a blockchain-native operator a foothold in the core mechanics of securities settlement in the U.S. If Paxos can scale these services while meeting regulatory obligations, the move could accelerate adoption of tokenized securities and faster settlement cycles. It also positions Paxos as a direct competitor to legacy post-trade providers pursuing tokenization strategies, even as the company continues to navigate the scrutiny that follows high-profile operational incidents. Read more AI-generated news on: undefined/news