The New York regulated financial firm Paxos has opened a block-chain settlement platform. The company is also the issuer of a stablecoin linked to the US dollar.
The Paxos Settlement Service platform was announced in late 2019. Paxos Trust Company has now launched the product for settling selected US listed equity transactions between the two broker-dealers Credit Suisse and Instinet. Credit Suisse is a Swiss financial services company and Instinet is a company belonging to the Nomura Group, according to a February 20 announcement.
Paxos: SEC registration as clearing house in 2020
As has been reported, the Paxos Settlement Service is being launched. An exemption regulation of the major US financial regulator SEC is in effect. This exemption states that the authority will not take any action against Paxos once the company opens its settlement platform.
However, Paxos still intends to submit an application to the SEC in 2020 to register as a clearing house. This will allow the company to offer its settlement service to all broker-dealers, the company announced.
Société Générale joins Paxos Settlement Service
Paxos Settlement Service is a private, permission-based block chain tool designed to enable participants to settle securities transactions directly with each other. In its first use, the service enables Credit Suisse and Instinet to exchange cash and securities simultaneously for the settlement of transactions. The third member, the French conglomerate Société Générale, also plans to settle equity trading transactions listed in the US via the Paxos Settlement Service in the near future.
Leaders of the joint initiative expressed confidence that the new platform will provide greater efficiency and long-term cost benefits in global securities settlement and trading. Emmanuel Aidoo, Head of Digital Asset Markets at Credit Suisse, emphasized that the Paxos platform complies with the applicable regulations:
“The initiative can deliver great efficiency and cost savings in the post-trading cycle. Paxos Settlement Service uses block-chain technology that is compliant with current regulations. This allows us to take important steps towards an evolving market structure and the release of capital trapped in old settlement processes”.
Paxos has so far been supported by several major regulatory agencies in the US. Following approval by the New York Financial Services Authority, the company launched a US dollar-linked stablecoin called Paxos Standard (PAX) in 2018. A year later, Paxos launched a gold token called PAX Gold (PAXG) based on the Ethereum block chain. It was reported that the New York Financial Supervisory Authority approved the issue of the Altcoin, describing it as “the first gold-linked virtual currency in New York State.