Paxos – a stablecoin operating entity in the US – has reportedly disclosed its initiative to finalize the application for a formal clearing agency license with the US SEC. 

Specifically, the initiative reportedly has a goal of offering an additional practical use case for blockchain technology in traditional markets. 

Paxos’ efforts of trying to obtain an agency license are reportedly conducted after a successful trial phase of its same-day settlement system. 

Credit Suisse – a financial institution from Zurich – as well as Instinet, the trading-focused branch of Nomura Holdings Inc, reportedly took part in the pilot, via finalizing the settlement of U.S.-listed stock trades on the same day.

Paxos reportedly revealed that the trades are representative of the first live application of blockchain for U.S. equities. The standard settling time for a trade for the US-based equity markets is reportedly 48 hours. 

The attempts to make this time shorter have reportedly gathered attention in the wake of the GameStop saga.

It is mandatory for establishments to finalize their registration with the US securities regulator prior to their initiative to run a clearinghouse. 

“Section 17A of the Securities Exchange Act of 1934 (‘Exchange Act’) and Rule 17Ab2-1 require an entity to register with the Commission or obtain an exemption from registration prior to performing the functions of a clearing agency.”

Paxos has reportedly been the center of attention in late 2020, following its successful attempt of securing $142 million from high-profile investors, nominally PayPal and Mithril Capital, to widen the scope of its financial market infrastructure.