October 28, 2021

Paxos applies for clearing license with SEC following successful pilot tests

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Paxos, a United States-based stablecoin operator, announced Tuesday that it will apply for a formal clearing agency license with the Securities and Exchange Commission in a move that would bring another practical use case for blockchain technology in traditional markets. 

As Reuters reported, the pursuit of an agency license by Paxos follows a successful pilot test of its same-day settlement system. Credit Suisse, a Zurich-based financial institution; and Instinet, the trading arm of Nomura Holdings Inc, participated in the pilot by settling U.S.-listed stock trades on the same day.

Paxos says the trades represented the first live application of blockchain technology for U.S. equities. It currently takes two days to settle a trade for equity markets in the United States. Efforts to shorten this time have gained traction in the wake of the GameStop saga.

Entities must register with the U.S. securities regulator before they operate a clearinghouse. As the SEC notes:

“Section 17A of the Securities Exchange Act of 1934 (‘Exchange Act’) and Rule 17Ab2-1 require an entity to register with the Commission or obtain an exemption from registration prior to performingTitle: Paxos applies for clearing license with SEC following successful pilot tests
Sourced From: cointelegraph.com/news/paxos-applies-for-clearing-license-with-sec-following-successful-pilot-tests
Published Date: Tue, 06 Apr 2021 19:45:00 +0100