Paxos is preparing an application to the United States Securities and Exchange Commission (SEC) for an official clearing agency licence. The firm plans to obtain registration by the end of 2021.
Prior to that, Paxos successfully completed a pilot project in which Credit Suisse and Instinet, Nomura Holdings’ trading arm, settled a securities trade through the company’s blockchain platform.
The firm noted that Paxos Settlement Service enabled settlement to be completed on the same day, although the U.S. equity market normally settles in two days.
“Settlement of US stocks is opaque and associated with unnecessary delays, capital expenditures and costs. We are making every effort to improve the process in the interests of all market participants. A modernized settlement system can create safer, fairer and more open capital markets that foster innovation,” said Paxos CEO Charles Cascarilla.
According to the company’s statement, the pilot trade marked the first real-world use of blockchain technology in the U.S. stock market.
Paxos has also applied for a national-trust bank license.
In December, the company raised $142 million in a financing round with the participation of payments giant PayPal, which had previously selected it to manage assets within its cryptocurrency service.