Paxos Trust Company has launched Paxos Settlement Service, a settlement platform that will process transactions for a limited number of broker-dealers for certain listed US equity securities.
Credit Suisse and Société Générale will be the first in a group of early adopters to use Paxos Settlement Service.
Paxos Settlement Service is a private, permissioned blockchain solution designed to allow two parties to bilaterally settle securities trades directly with each other.
The platform, which will be the first live application of blockchain technology for US equities, enables settlement of securities trades more cost-effectively and securely than the legacy system.
It allows for the simultaneous exchange of cash and securities to settle trades and is backward-compatible with current processes, simplifying integration.
The announcement comes after Paxos received no-action relief from the US Securities and Exchange Commission.
Charles Cascarilla, CEO and co-founder of Paxos, said: “The US equities business continues to face unprecedented consolidation and economic pressures, requiring a comprehensive transformation of market structure. This is an important first step on our journey to reimagine the entire post-trade infrastructure, and one that creates immediate benefits for market participants.”
He added: “We look forward to working with our early adopter partners to further develop the ecosystem. Together, we’ll create financial benefits and achieve operational efficiencies with blockchain technology that will facilitate an open financial system.”
Emmanuel Aidoo, head of digital asset markets at Credit Suisse, commented: “We believe the process of securities settlement can be greatly optimised using blockchain, and with Paxos Settlement Service we will benefit from these efficiencies first hand.”
Jeffrey Rosen, COO of global markets, Americas at Société Générale, said: “This service has the ability to deliver meaningful benefits to our operations and business and we are excited to be on board.”
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