Paxos’ DLT Settlement Platform Is Live

A New York-regulated financial company and issuer of a dollar-tethered stablecoin Paxos, has launched its blockchain-powered settlement platform.

After unveiling Paxos Settlement Service at the end of 2019, Paxos Trust Company has launched the platform to settle some United States-listed equity trades between the two broker-dealers, Swiss financial services company Credit Suisse and Nomura Group-owned Instinet, as February 19 news release shows.

Paxos plans to apply with the SEC for clearing agency registration later this year

Paxos Settlement Service is being launched under no-action relief from the United States Securities and Exchange Commission (SEC). With the no-action relief the commission will not take any action against Paxos when the company starts to introduce its settlement platform.

Despite that, Paxos wants to apply for clearing agency registration with the SEC this year in order to present its service to all broker-dealers, according to the announcement.

Société Générale to join Paxos Settlement Service soon

Paxos Settlement Service is a private, permissioned blockchain service created to allow users to mutually settle securities trades directly with each other. In its first real-life use case with Credit Suisse and Instinet, the platform allows concurrent exchange of cash and securities to settle trades. The French conglomerate Société Générale also plans to begin settling U.S.-listed equities trades via Paxos Settlement Service.

Executives at the joint initiative asserted that the new platform will ensure more efficiency and long-term cost benefits for global securities settlement and trade. Emmanuel Aldoo, head of digital asset markets at Credit Suisse, stressed that Paxos service complies with relevant regulations:

“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.”

Many major U.S. regulators have supported Paxos so far. After getting an approval from the New York Department of Financial Services, the company introduced a dollar-backed stablecoin named Paxos Standard (PAX) in 2018. A year later, Paxos introduced a gold-backed token on the Ethereum blockchain, named PAX Gold (PAXG). The New York Department of Financial Services approved the launch of the altcoin, calling it the “first gold-backed virtual currency in New York state.”