Paxos announced on May 28, 2026, that its subsidiary Paxos Securities Settlement Company, LLC, received registration as a clearing agency from the United States Securities and Exchange Commission (SEC). The authorization was granted under Section 17A of the Securities Exchange Act of 1934.
With this regulatory decision, the firm becomes the first blockchain-native company approved by the SEC to offer clearing and settlement services as a central securities depository in the United States. The development places Paxos within the operational layer of the financial infrastructure that processes the closure of securities trades.
Clearing and settlement comprise the stages following the execution of a stock market trade. During this process, the identity of buyers and sellers is verified, the legal transfer of ownership is administered, and the exact moment the transaction is finalized is determined. This administrative function remains essential for market maintenance.
The SEC’s measure establishes a formal contact point between blockchain technology and traditional capital markets. On-chain systems are integrating directly with the regulated circuits of the US market, requiring compliance with high operational and counterparty risk management standards for actors intervening in core post-trade functions.
Regulatory trajectory and operational testing
Paxos CEO and co-founder Charles Cascarilla indicated that the authorization is the result of seven years of joint work with the US regulator. The formal process began with obtaining a No-Action Letter in 2019, a mechanism that allows companies to test operational models under supervision and specific conditions without facing enforcement actions.
Since February 2020, under the protection of this letter, Paxos executed a daily pilot focused on the clearing and settlement of US equities. This testing environment included the participation of various global financial institutions. During the execution period, the infrastructure documented its capacity to conduct same-day settlements, modify cost structures, and maintain operational efficiency within a strict compliance framework.
The order issued by the SEC specifies that the granted permission initially functions as a temporary registration. Paxos Securities Settlement Company will use this status to provide back-office services for transactions involving eligible securities, managing the transfer of ownership and the settlement schedule once market orders are executed.
Asset platform and capital structure
The license expands the scope of a company that maintains active operations under multiple jurisdictions. Paxos currently holds prudential supervision from the Office of the Comptroller of the Currency (OCC) in the United States, the Financial Supervisory Authority (FIN-FSA) in Europe, and the Monetary Authority of Singapore (MAS).
The company manages technological infrastructure used by corporations such as PayPal, Interactive Brokers, Mastercard, and Mercado Libre. Additionally, it operates as an issuer of specific digital assets, including PayPal USD, Pax Gold, and Global Dollar (USDG). The latter asset is issued by Paxos Digital Singapore under MAS regulation, and by Paxos Issuance Europe in compliance with the European MiCA regulatory framework, maintaining availability on networks like Solana, Ink, X Layer, and Ethereum.
To support the development of its institutional infrastructure, the firm has raised over USD 500,000,000 from investment entities such as Oak HC/FT, Declaration Partners, Founders Fund, and PayPal Ventures.
The operational implementation of Paxos Securities Settlement Company will depend on the technical integration of its commercial partners and the submission of the reports required by the United States Securities and Exchange Commission under the conditions of its current authorization.
This article is for informational purposes only and does not constitute financial advice.
