Paxos’ equity settlement business goes live with Credit Suisse and Nomura’s Instinet as first clients

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Stablecoin issuer Paxos has officially ventured into the business of blockchain-based equity settlement.

Announcing the news on Thursday, Paxos said Credit Suisse and Nomura’s Instinet are the first two firms to use its settlement service, which helps settle select U.S. listed equity trades.

The service operates on a private and permissioned network. "It's the first time that blockchain is being used in a live environment, the first time that U.S. equities are settling outside the DTC/NSCC [Depository Trust Company/ National Securities Clearing Corporation system],” a Paxos spokesperson told The Block.

Societe Generale, which initially signed up for the service, will begin using it "soon," said Paxos.

Today’s launch follows no-action relief Paxos got from the U.S. Securities and Exchange Commission (SEC) in October. Paxos today said it will also submit its application for clearing agency registration with the SEC sometime this year so that it can offer the settlement service to all street-side broker-dealers.

Emmanuel Aidoo, head of digital asset markets at Credit Suisse, said the settlement service will allow the firm to deliver “great efficiency and cost savings to the post-trade cycle” and to unlock capital “that is tied up in legacy settlement processes.”

Paxos was working on its settlement service for over the past 18 months, Melayna Ingram, director of product management at the firm, told The Block in October. Equity settlement is a multiple quadrillion dollar corner of Wall Street, and Paxos is aiming to disrupt it. It remains to be seen how many broker-dealers sign up for the service ahead.

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May 5, 2022, 3:17PM UTC
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