Paxos applies for clearing license with SEC following successful pilot tests

Paxos applies for clearing license with SEC following successful pilot tests


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, or SEC, 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 U.S. Efforts to shorten this time have gained traction in the wake of the GameStop saga.

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

“Section 17A of the Securities Exchange Act

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