US-based blockchain infrastructure company Paxos crossed a key regulatory threshold on May 28, 2026, announcing that its subsidiary Paxos Securities Settlement Company (PSSC) has been officially registered as a custodian with the Securities and Exchange Commission (SEC). With this development, Paxos became the first blockchain-based company in the United States to achieve this status.
Regulation and its Effect on Markets
The approval Paxos received paved the way for integration with blockchain technologies in traditional capital markets. Custody and settlement agencies match the records of buying and selling parties in securities transactions, verify the details of the transaction and guarantee the exchange of money and assets. Thus, it largely eliminates the counterparty risk in the market.
The SEC approved PSSC’s registration application under Section 17A of the Securities Exchange Act. While well-established institutions such as the Depository Trust and Clearing Corporation (DTCC) were previously operating in this field in the US market, blockchain-based systems have officially taken their place in this arena with Paxos.
Paxos CEO and co-founder Charles Cascarilla stated that the registration decision was the result of a seven-year study and reminded that the process started with the No-Action Letter received from the SEC in 2019.
Paxos’ Pilot Applications and Blockchain Infrastructure
Paxos has not had an easy ride to this day. In February 2020, the company launched a live custody and settlement pilot in collaboration with global financial institutions. This pilot enabled daily US stock trading with special permission from the SEC.
The pilot application showed that transactions completed on the same day with blockchain-based infrastructure can be managed in full compliance with regulations. It has also been revealed that it can offer lower cost and higher operational efficiency compared to traditional systems. While the settlement of a transaction in the US markets generally takes a few business days currently, the “instant delivery and payment” principle stands out in the model offered by Paxos.
Mini dictionary: Custody and settlement agency is the intermediary that completes the exchange of money and assets between parties in buying and selling transactions safely and smoothly. It increases confidence in the markets by reducing counterparty risk.
| Custody Memorandum of Understanding | Infrastructure | Working Model | Approving Body | Place |
|---|---|---|---|---|
| Paxos PSSC | blockchain | Instant delivery/payment | SEC | USA |
| DTCC | traditional finance | Multi-day, batch processing | SEC | USA |
The Future of Financial Infrastructure with Blockchain
With this new registration, Paxos aims to strengthen infrastructure services for financial institutions and facilitate the introduction of digital assets products to the market. The company will be able to provide direct custody and settlement services for certain securities transactions. In this way, blockchain technology becomes the basis of a regulated infrastructure in the US financial market for the first time.
This development, which has a great impact in both crypto and traditional finance circles, is interpreted as an indicator that regulatory institutions are starting to adopt blockchain-based solutions more.
In Paxos’ statement, it was emphasized that this approval forms an important basis in the company’s growth strategy, both legally and commercially.
