Paxos Goes Live with Settling Stock Trades on Blockchain Platform

Post-trade Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term startup Paxos has officially launched its settlement service that allows the firm to process transactions on select US-listed stocks between a limited number of broker-dealers.

Credit Suisse, Instinet, and Société Générale are the early adopters to use Paxos Settlement Service that enables any two parties to bilaterally settle securities trades directly with each other.

The announcement comes after Paxos received no-action relief to launch its blockchain-based settlement platform from the US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission. A no-action letter means the regulators will not take enforcement actions against Paxos for its product, allowing the company to delve into the use of blockchain technology with broader applications outside the context of crypto space.

The move is also a landmark interaction between the mainstream finance and the blockchain space, as the SEC for the first time greenlights settling US equities outside the legacy infrastructure.

Paxos to roll out clearing agency

Paxos will be able to settle a limited number of liquid, large-cap stocks through its platform that operates on “a private and permissioned distributed ledger system that records changes in ownership of securities and cash resulting from settlement of securities transactions between participants.”

The New York-based exchange and stablecoin issuer added it would continue to expand its settlement coverage to include all street-side broker-dealers and US-listed equities. In this context, it plans to seek the go-ahead from the SEC for its clearing agency later this year.

Paxos’ status as a licensed financial services company in the US allows it to potentially offer tokenized securities and also to access the traditional banking system.

Charles Cascarilla, Chief Executive Officer and Co-Founder of Paxos, stated, “Launching Paxos Settlement Service under No-Action relief is the first step in our journey to transform post-trade infrastructure in the securities industry. 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 modernizing market structure on a large scale.”