Paxos Wins SEC Approval for Blockchain-Based Clearing Agency Registration

The U.S. Securities and Exchange Commission has approved Paxos’s registration as a blockchain-based clearing agency, marking a further convergence of traditional finance and blockchain infrastructure. The decision could broaden the use of digital-asset technology in securities clearing and settlement.

Cointelegraph reported on May 29 that Paxos said its subsidiary, Paxos Securities Settlement Company, had received SEC approval for clearing agency registration.

With the approval, Paxos said it can act as a central securities depository, or CSD, in the U.S. and provide clearing and settlement services. The company said it is the first blockchain-native clearing agency to receive SEC approval.

A clearing agency verifies buyers and sellers in securities transactions, matches trade terms and helps ensure the final exchange of cash and securities is completed properly. An SEC-approved blockchain-based clearing agency could lower regulatory barriers for banks and brokerages building digital-asset-based market infrastructure.

Paxos received an SEC no-action letter in 2019 for a pilot program for blockchain-based settlement services for U.S. equities. It launched the service in February 2020. The company said the pilot demonstrated that blockchain-based post-trade infrastructure could support same-day settlement, lower costs and improve operational efficiency.

“This clearing agency registration is the result of seven years of engagement with the SEC that began with the 2019 no-action letter and a settlement pilot run with major global financial institutions,” Charles Cascarilla, Paxos co-founder and chief executive officer, said.

Paxos issues several stablecoins and digital assets, including PayPal USD, Global Dollar and Pax Gold.

The company has also faced regulatory disputes tied to Binance USD, or BUSD. The SEC sent Paxos a Wells notice in 2023, but ended its investigation in 2024 without pursuing an enforcement action. The New York State Department of Financial Services ordered Paxos in 2023 to stop issuing new BUSD. Paxos reached a $48.5 million settlement with the regulator in August 2025 over compliance issues related to Binance and BUSD.

The approval could help Paxos expand beyond stablecoin issuance into back-end infrastructure for traditional financial markets. Market participants say blockchain-based clearing and settlement infrastructure could provide a foundation for broader digital-asset use by regulated financial institutions.