Blockchain-Enabled Securities Settlement Solution Launched By Paxos

Blockchain-Enabled Securities Settlement Solution Launched By Paxos

February 24, 2020

Blockchain startup Paxos has launched a private, permissioned blockchain solution designed to allow two parties to bilaterally settle securities trades directly with each other.

Called Paxos Settlement Service, the blockchain solution facilitates settlement with delivery-versus-payment settlement finality. It claims to be the new market infrastructure that can power digital transformation and enable structural cost reduction.

“Now operational, the service represents the first live application of blockchain technology for listed U.S. equities,” Paxos said. “Paxos launched the service under No-Action relief from the staff of the U.S. 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 U.S. listed equities trades with Paxos Settlement Service.”

Emmanuel Aidoo, Head of Digital Asset Markets at Credit Suisse, said that the initiative has the potential to deliver great efficiency and cost savings to the post-trade cycle.

“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,” said Aidoo.

Later this year, Paxos said that it will submit its application for clearing agency registration with the SEC so that it can offer the blockchain solution to all street side broker-dealers to settle U.S. 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, Chief Executive Officer 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 modernizing market structure on a large scale.”

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