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Paxos becomes first blockchain native firm approved as SEC clearing agency

Paxos is now authorized to operate as a clearing agency for blockchain-based securities, following approval from the U.S. Securities and Exchange Commission. The company claims to be the first in the U.S. built entirely on blockchain technology to offer these central securities depository services.

Summary

  • Paxos has received SEC approval to operate a blockchain-based clearing agency for U.S. securities settlement.
  • The approval follows a multi-year pilot program that Paxos said demonstrated same-day settlement and lower operational costs.
  • The milestone comes as Paxos expands its institutional infrastructure business, including enterprise stablecoin services through Paxos Labs.

Paxos received approval for its division, Paxos Securities Settlement Company, to provide clearing and settlement services for stock trades, all under the supervision of the SEC.

Paxos has received approval from the Securities and Exchange Commission (SEC) to operate as a clearing agency. This makes us the first and only blockchain-based company authorized to provide clearing and settlement services as a central securities depository in the U.S. With this…

— Paxos (@Paxos) May 28, 2026

The company announced that this approval allows traditional financial firms to safely use blockchain technology for processes that happen after a trade is made. Clearing agencies act as a middleman between buyers and sellers, confirming deals, finding matching parties, and making sure money and investments are exchanged accurately once a transaction is finalized.

Paxos has received approval after a long period of working with regulators. The company initially received a letter from the SEC in October 2019, permitting them to trial a blockchain platform for settling U.S. stock trades. This pilot program, launched in February 2020, demonstrated that blockchain technology could enable faster, cheaper, and more efficient trade settlements without violating existing regulations.

Paxos CEO Charles Cascarilla explained that their registration as a clearing agency is the culmination of seven years of collaboration with the SEC. This process began with a No-Action Letter in 2019 and included a successful trial program involving some of the world’s leading financial institutions.

Now that Paxos has registered with the SEC, its clearing agency can offer blockchain-based settlement services for U.S. securities, all within a fully regulated system.

Long regulatory process ends with SEC approval

The approval arrives after several years of regulatory scrutiny involving the company.

As a crypto investor, I was pretty concerned when, in 2023, the SEC sent Paxos a Wells Notice regarding Binance USD (BUSD). Basically, the SEC was hinting it might take legal action, claiming BUSD could be an unregistered security. It created a lot of uncertainty in the stablecoin market, and I definitely paid attention to how things unfolded.

Around the same time, New York’s financial regulator ordered Paxos to halt the creation of any new BUSD tokens.

The following year brought a different result, as the SEC officially ended its investigation and stated it wouldn’t take any legal action. Then, in August 2025, Paxos agreed to pay $48.5 million to the New York Department of Financial Services to settle issues related to its work with Binance and the BUSD stablecoin.

Approval expands Paxos’ infrastructure footprint

In addition to its core settlement services, Paxos offers a range of digital asset products like PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG).

The company has recently been investing in the infrastructure needed for wider use of stablecoins by institutions. For example, in April 2026, Paxos Labs – a new company founded by Cascarilla – received $12 million in funding from investors like Blockchain Capital, Robot Ventures, Maelstrom, and Uniswap Labs.

Paxos Labs is building technology that helps big companies create their own branded stablecoins and add smart payment options to their businesses, according to previously released information.

These developments are happening as financial and tech companies increasingly look into using digital money and blockchain technology to speed up and simplify transactions. Paxos announced that its recently approved clearing agency can provide a secure and regulated base for banks, brokers, and other companies wanting to create new blockchain-based systems for financial markets.

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2026-05-29 09:11