Paxos, a New York-regulated financial institution that digitizes and mobilizes assets, announced it launched a service that can now settle select US-listed equity trades between broker-dealers Credit Suisse and Instinet.
Paxos launched its Settlement Service under No-Action relief from the staff of the US Securities and Exchange Commission (SEC). In launching the service with Credit Suisse and Instinet, Paxos is allowing for the simultaneous exchange of cash and securities to settle trades. A third participant, Société Générale, will soon also begin settling US-listed equities trades with Paxos Settlement Service.
The service is a private, permissioned blockchain solution designed to allow two parties to bilaterally settle securities trades directly with each other. Now operational, the service represents the first live application of blockchain technology for listed US equities. Additionally, Paxos announced that it will submit its application for clearing agency registration with the SEC in 2020 so that it can offer the service to all streetside broker-dealers to settle US-listed equities.
Emmanuel Aidoo, head of Digital Asset Markets at Credit Suisse, said in a statement: “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.”