Paxos Steps into the Spotlight
Paxos, a firm regulated by New York’s financial authorities, has just launched its cutting-edge blockchain-based settlement platform. This significant development comes after the company’s announcement back in late 2019 regarding the Paxos Settlement Service. It’s now set to change the way select equity trades are settled between broker-dealers, with Credit Suisse and Nomura Group’s Instinet kicking things off.
No-Action Relief: A Golden Ticket
The Paxos Settlement Service is entering the market with the backing of a no-action relief from the SEC. This means that the agency won’t be pulling any surprises on Paxos while they roll out this innovative platform. Paxos is not resting on its laurels, though; they plan on filing for full clearing agency registration with the SEC later in 2020.
A Permissioned Blockchain Playground
What makes the Paxos Settlement Service particularly interesting is its private, permissioned blockchain. This sophisticated tool is designed to facilitate direct settlements of securities trades among participants. The platform not only initiates smooth transactions but also provides a safe space for Cash and securities to exchange hands simultaneously. It’s like a high-stakes game of musical chairs, but everyone ends up with what they want without the chaos!
A Growing Network of Partners
Société Générale is next in line to join the Paxos party, getting ready to settle U.S.-listed equities trades through this service. The excitement among the executives involved is palpable. Emmanuel Aidoo from Credit Suisse has high hopes for the platform, speaking about how it stands to boost efficiency and reduce costs in global securities settlement and trading processes. He noted,
“The initiative has the potential to deliver great efficiency and cost savings to the post-trade cycle.”
Paxos: A History of Innovation
This isn’t Paxos’s first rodeo. The company previously charmed regulators with its USD-backed stablecoin, Paxos Standard (PAX), which hit the scene in 2018 following approval from the New York Department of Financial Services. Not far behind, Paxos also introduced a gold-backed token on the Ethereum blockchain, known as PAX Gold (PAXG), proudly calling itself the “first gold-backed virtual currency in New York state.” This forward-thinking approach puts Paxos firmly in the driver’s seat of innovation in financial services.
