US Equities Settled By Blockchain In Live Environment02.21.2020
Paxos Trust Company, a New York-regulated financial institution that digitizes and mobilizes assets, today announced it launched the Paxos Settlement Service. The service can now settle select U.S. listed equity trades between broker-dealers Credit Suisse and Instinet, LLC.
Today we’re one step closer to modernizing the financial system. The Paxos Settlement Service is live with @CreditSuisse and Instinet. It’s the first time #blockchain is being used in a live environment for US #securities. https://t.co/a7i7kDit2R
— Paxos (@PaxosGlobal) February 20, 2020
Paxos Settlement Service is a private, permissioned blockchain solution designed to allow two parties to bilaterally settle securities trades directly with each other. Now operational, the service represents the first live application of blockchain technology for listed U.S. equities. Paxos launched the service under No-Action relief from the staff of the U.S. Securities and Exchange Commission (SEC). In launching the service with Credit Suisse and Instinet, Paxos is allowing for the simultaneous exchange of cash and securities to settle trades. A third participant, Société Générale, will soon also begin settling U.S. listed equities trades with Paxos Settlement Service.
Additionally, Paxos announced that it will submit its application for clearing agency registration with the SEC in 2020 so that it can offer the Paxos Settlement Service to all street side broker-dealers to settle U.S. listed equities.
Charles Cascarilla, Chief Executive Officer and Co-Founder of Paxos, stated, “Launching Paxos Settlement Service under No-Action relief is the first step in our journey to transform post-trade infrastructure in the securities industry. We’ve worked closely with Credit Suisse and Instinet to build a solution that can deliver long-term cost benefits and together we will refine the system in a live environment. Our upcoming application for clearing agency registration demonstrates our dedication to modernizing market structure on a large scale.”
Emmanuel Aidoo, Head of Digital Asset Markets at Credit Suisse, commented, “The initiative has the potential to deliver great efficiency and cost savings to the post-trade cycle. Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes.”
Luke Mauro, Global Head of Operations at Instinet Holdings Incorporated, added, “Instinet has always been committed to finding new and innovative ways to integrate technology into the trading life cycle to improve efficiency and benefit our clients. Going live with Paxos Settlement Service will bring about significant digital transformation to this part of the trading process and help to optimize securities settlement.”
FIX is due to launch standards for digital assets.
Reductions in issuance costs could lead to an expansion of capital markets.
The decision to raise capital with INX under U.S. securities laws is a pioneering step.
Institutions do not want to navigate multiple vertical silos and blockchains.
The SETL/Colendi enterprise is preparing a new public blockchain infrastructure.