Paxos Wins First-of-Its-Kind SEC Clearing Agency Approval as Blockchain Settlement Moves Into Regulated Markets

Paxos announced Thursday that its subsidiary, Paxos Securities Settlement Company, LLC (PSSC), has been granted registration as a clearing agency by the U.S. Securities and Exchange Commission under Section 17A of the Securities Exchange Act of 1934. The approval makes PSSC the only blockchain-native firm registered to provide clearing and settlement services as a central securities depository in the United States, placing Paxos inside the same regulated post-trade infrastructure layer as the Depository Trust & Clearing Corporation (DTCC).

The registration is described as temporary in the SEC‘s order, but it represents the clearest signal yet that blockchain-based settlement is moving from experiment to regulated financial plumbing. The approval is the result of seven years of engagement with the SEC, beginning with a 2019 No-Action Letter and a 2020 settlement pilot that processed equity trades for AT&T and General Electric. The SEC had designated May 3, 2026, as the deadline for the Commission to grant or deny PSSC‘s application in a Federal Register notice published in February, and Thursday’s approval lands within that window.

This story is an excerpt from the Unchained Daily newsletter.

For Paxos, the clearing agency registration unlocks a structurally different business than its stablecoin or custody operations. As a registered CSD, PSSC can hold and settle traditional securities trades directly on blockchain rails, providing same-day or near-instant settlement for eligible securities. The 2020 pilot demonstrated lower costs and operational efficiency within an SEC-supervised framework, and the broader registration now allows institutional participation at scale.

The approval lands during a particularly active stretch for tokenized securities infrastructure. The SEC‘s planned “innovation exemption” for tokenized stocks has been delayed amid concerns about third-party synthetic tokens, and DTCC itself announced this week a partnership with the Stellar Development Foundation to tokenize DTC-custodied assets, including Russell 1000 equities and US Treasuries, on Stellar‘s public blockchain in the first half of 2027. Nasdaq won SEC approval for tokenized equity trading in March and NYSE followed in April, with both operating under DTC‘s three-year tokenization pilot.

Paxos, prudentially regulated by the OCC in the US, FIN-FSA in Europe, and the MAS in Singapore, partners with PayPal, Interactive Brokers, Mastercard, and Mercado Libre. The company’s stablecoin business and tokenization platform now extend into the most regulated layer of US capital markets infrastructure, where the questions ahead are no longer about whether blockchain settlement is viable but about which incumbents will adopt it and on what terms.