Blockchain Revolution Series: Paxos To Settle Wall-Street Equities on Blockchain-Driven Platform, and Credit Suisse For Piloting

Paxos is all set to roll out blockchain-based settlement platform for a series of United States-listed equity shares. 

Paxos, which is a New-York based FinTech and digital asset trust company, made an announcement in a press release on October 28th, that it is launching of its blockchain-based settlement platform, after the clearance of no-action relief from the U.S. Securities and Exchange Commission (SEC).

The SEC has also clarified with the clearing agency registration that indicated that Paxos is from the commission as there is no action against their settlement process, which means the company can now proceed with its settlement platform. 

Charles Cascarilla, the CEO and co-founder of Paxos, stated that “We're starting with U.S. listed equities, but this technology can be scaled to many asset classes across geographies and for all types of clients."

The director of product management at the firm, Melayna Ingram, confirms Two European banks, namely, Credit Suisse and Société Générale, are most likely to line-up for the pilot testing on this platform. 

Emmanuel Aidoo, the head of digital asset markets at Credit Suisse, commented, "At Credit Suisse, we are committed to exploring innovative applications of blockchain technology that can improve our business, as well as our clients' experience. We believe the process of securities settlement can be greatly optimized using blockchain, and with Paxos Settlement Service we will benefit from these efficiencies first hand. We see this as a significant and important milestone in our Digital Asset Markets strategy and foresee opportunities to leverage this product across numerous asset classes in the future." 

While the Chief Operating Officer, Americas Global Markets at Société Générale, Jeffrey Rosen, added, "By implementing Paxos Settlement Service as an early adopter, we will be able to tailor the system to our needs and introduce a technology that can positively impact our cost structure in both the immediate and long-term. This service has the ability to deliver meaningful benefits to our operations and business and we are excited to be on board."

According to the SEC letter to Mr. Cascarilla Mr.Burstein, as the operator of the Paxos Settlement Service, Paxos believes that it will be acting as a clearing agency under the definition of such in Section 3(a)(23) of the Exchange Act because Paxos will be an intermediary in making payments or deliveries or both in connection with transactions in securities and will also be providing facilities for comparison of data respecting the terms of settlement of securities transactions 4 Section 17A(b)(1) of the Exchange Act states in relevant part that it shall be unlawful for any clearing agency, unless registered in accordance with this subsection, directly or indirectly, to make use of the mails or any means or instrumentality of interstate commerce to perform the functions of a clearing agency with respect to any security.