Credit Suisse, Societe Generale To Use Paxos Blockchain Settlement Platform

Blockchain, News | October 30, 2019 By:

Post-trade blockchain startup Paxos has received a “no-action” letter from the US Securities and Exchange Commission (SEC) to launch a blockchain-based settlement platform for US-listed securities.

Paxos, formerly itBit, is a financial technology company offering blockchain solutions for global financial institutions. The firm launched a stablecoin last year and in September got approval from New York’s Department of Financial Services to launch a gold-backed digital token.

Earlier this week, Paxos announced that it has on-boarded Credit Suisse and Société Générale to utilize the new blockchain-based settlement platform as its first two clients. According to Paxos, this is the first time in half a century that US equities will be settled outside a traditional settlement system.

The platform will reportedly reduce fees and help clients gain access to capital otherwise trapped in the legacy settlement system. The platform will also allow the simultaneous exchange of cash and securities to settle trades and is compatible with current systems, simplifying integration.

“The US equities business continues to face unprecedented consolidation and economic pressures, requiring a comprehensive transformation of market structure,” said Charles Cascarilla, CEO and Co-Founder of Paxos. “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.”

Emmanuel Aidoo, head of digital asset markets at Credit Suisse, said that they believe the process of securities settlement can be greatly optimized using blockchain, and with Paxos Settlement Service they 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.