In a company disclosure, Paxos stated that its subsidiary, Paxos Securities Settlement Company, has been granted clearing firm registration by the U.S. Securities and Exchange Commission (SEC) under Section 17A of the Securities Exchange Act of 1934. Following registration, the company can provide clearing and settlement services as a central securities depository, provided it continues to meet regulatory requirements.

Securities custody and settlement services can be provided.

Paxos stated that this registration makes it the first blockchain-native company in the U.S. to receive SEC approval to operate as a central securities depository. The SEC approval document describes it as a "provisional registration," meaning the company must continue to meet ongoing compliance requirements while conducting its business.

Charles Cascarilla, CEO and co-founder of the company, said the qualification will enable Paxos to provide its partners with a more complete infrastructure to adapt to the trend of combining securities markets with blockchain technology.

Approved after seven years of progress

Paxos stated that this result stemmed from approximately seven years of regulatory communication. The timeline includes:

• In 2019, the SEC issued a letter stating that it would not take enforcement action.
• Securities settlement pilot program launched in February 2020
• In 2022, a T+0 stock settlement pilot program was launched with State Street.

According to the company, the pilot project, which began in 2020, has been operating under an SEC exemption framework, handling daily clearing and settlement for U.S. stocks, with participants including several large global financial institutions. In 2022, Paxos and State Street launched a blockchain pilot program that enabled same-day settlement of stock transactions, also known as T+0.

Competition for tokenized infrastructure intensifies

This registration approval comes as traditional financial infrastructure institutions are also accelerating their tokenization efforts. Recently, the U.S. Depository Trust and Clearing Corporation (DTCC) disclosed that it is advancing a tokenization service backed by large Wall Street institutions.

Paxos also issues several digital assets, including PayPal's stablecoin PYUSD and the gold token PAXG. In October 2025, the company briefly misminted and subsequently destroyed 300 trillion PYUSD due to an internal technical error. Several months later, Paxos received conditional approval to become a national trust bank regulated by the Office of the Comptroller of the Currency (OCC), thus operating under a single federal regulatory framework.

Additional information:The entity that received approval this time is Paxos' securities settlement subsidiary, not its stablecoin issuing entity itself, but both point to the company's expansion in compliant financial infrastructure.