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The need to modernize the current settlement system has been one of the many endeavors of those operating within the blockchain ecosystem. And now, after years of waiting, there will be a legitimate replacement to the legacy system that has proven to be outdated.
Enter Paxos, a New-York-based regulated financial institution that’s been working on a project to accelerate the settlement process using blockchain technology.
Paxos gets no-action relief from the SEC
The Securities and Exchange Commission (SEC) has recently granted the company a no-action relief. This is a significant step forward as the relief means the regulatory body will not be hindering the intended action of Paxos, allowing it to use a blockchain platform to settle certain listed U.S. equity securities.
Called Paxos Settlement Service, the system will be operating on a private and permissioned network, with Credit Suisse and Société Générale as the first companies to use the service, Paxos said in a press release.
Once Credit Suisse and Société Générale receive the green light from the SEC to settle using the new platform, Paxos will start settlement of U.S. equity transactions, Reuters reported.
Melayna Ingram, Paxos’ head of securities products and the product director for the service, said that Credit Suisse and Société Générale have been providing valuable insight on how to build the project. Aside from the two companies, Paxos has also collaborated with the SEC to ensure that they’re in line with the agency’s regulatory restrictions, CoinDesk reported.
Blockchain gains more credibility as Paxos Settlement Service goes live
Chief executive officer and co-founder of Paxos Charles Cascarilla said that the SEC will likely approve the filing 30 days after submission by the two early adopters. With blockchain in the picture, the settlement will be faster, tamper-proof; can be monitored in real-time, and will provide a ledger that can’t be altered.
Credit Suisse head of digital asset markets Emmanuel Aidoo said that the company has been trying to find a way to modernize the current system to create a positive customer experience, while also streamlining their operation.
“We believe the process of securities settlement can be greatly optimized using blockchain, and with Paxos Settlement Service we will benefit from these efficiencies first hand. We see this as a significant and important milestone in our Digital Asset Markets strategy and foresee opportunities to leverage this product across numerous asset classes in the future,” Aidoo said.
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