Paxos has received approval from the U.S. Securities and Exchange Commission to operate a blockchain-based clearing agency, becoming what the company says is the first blockchain-native firm authorized to provide central securities depository services in the country.
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.
According to Paxos, the approval was granted to its subsidiary, Paxos Securities Settlement Company, allowing it to offer clearing and settlement services for securities transactions under SEC oversight.
The company said the registration gives traditional financial institutions a regulated path to use blockchain technology for post-trade operations. Clearing agencies sit between buyers and sellers, verifying trades, matching counterparties, and ensuring that cash and securities are exchanged correctly once a transaction is completed.
For Paxos, the approval follows years of engagement with regulators. Back in October 2019, the SEC issued a no-action letter that allowed the company to test a blockchain-powered settlement platform for U.S. equities. Paxos launched the pilot in February 2020 and said the program showed that blockchain infrastructure could support same-day settlement while lowering costs and improving operational efficiency within existing regulatory rules.
“Our clearing agency registration is the result of seven years of work with the SEC, beginning with our No-Action Letter in 2019 and the settlement pilot we operated with some of the world’s largest and most sophisticated financial institutions,” – Charles Cascarilla, co-founder and CEO of Paxos.
With SEC registration now secured, Paxos said its clearing agency business can provide blockchain-based settlement services within a fully regulated framework for U.S. securities markets.
Long regulatory process ends with SEC approval
The approval arrives after several years of regulatory scrutiny involving the company.
In 2023, the SEC issued a Wells Notice to Paxos related to Binance USD (BUSD), a stablecoin created in partnership with crypto exchange Binance. At the time, the regulator indicated it was considering an enforcement action because it viewed BUSD as a potential unregistered security.
During the same period, the New York Department of Financial Services directed Paxos to stop minting new BUSD tokens.
A different outcome emerged the following year when the SEC formally closed its investigation and notified the company that it would not pursue enforcement action. Later, in August 2025, Paxos reached a $48.5 million settlement with the NYDFS over compliance matters connected to Binance and BUSD.
Approval expands Paxos’ infrastructure footprint
Beyond its settlement business, Paxos operates several digital asset products, including PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG).
Recent moves by the company have also focused on infrastructure for institutional stablecoin adoption. In April 2026, Paxos Labs, a spin-off led by Cascarilla, raised $12 million from investors including Blockchain Capital, Robot Ventures, Maelstrom, and Uniswap Labs.
According to information disclosed at the time, Paxos Labs is developing technology that allows large enterprises to launch branded stablecoins and integrate programmable payment systems into corporate operations.
Those efforts come as financial firms and technology companies continue exploring tokenized money and blockchain-based settlement systems. Paxos said its newly approved clearing agency can serve as a regulated foundation for banks, brokerages, and other institutions seeking to build blockchain-enabled market infrastructure.
