According to foreign media news, Paxos announced today that it has taken the lead in launching its blockchain-based securities settlement service with Credit Suisse and Instinet, large financial service providers.
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"Paxos settlement service" refers to itself as "the first real-time application of blockchain technology for US-listed stocks." Compared to traditional post-transaction infrastructure, licensed blockchains can help parties settle securities transactions faster and cheaper.
Melayna Ingram, Paxos Securities Product Director, told Decrypt:
"Although there are a lot of innovations in the front desk and transactions happen in milliseconds, there is almost no innovation in the back office."
Paxos believes their services can "change the post-transaction infrastructure" through "simultaneous delivery and payment (DVP)."
This means that its services will be able to reduce settlement time by immediately providing payments to transactions.
Last November, the US Securities and Exchange Commission (SEC) sent Paxos a letter of inaction and Paxos was blessed by US regulators. As a result, Ingram explained that the "no action" decision "limited the number and stocks the company could settle." However, Paxos plans to file a clearing agent registration application later this year, which will allow it to extend its services to "all brokers to settle U.S.-listed stocks."
How Paxos paves the way for blockchain in the stock market
For a technology that promises to increase the speed of financial transactions and reduce costs, blockchains need to spend their time to enter Wall Street's regulated corridors.
Credit Suisse's head of digital asset markets, Emannuel Aido, said in a statement that the new regulatory-compliant service has enabled his company to "grow market structure and release and traditional settlement processes An important step in terms of capital. "
Luke Mauro, Head of Global Operations at Instinet, said:
"Use with Paxos settlement services will bring significant digital transformation to this part of the transaction process and help optimize securities settlement."
According to Paxos's announcement today, French lender Bank Societe General is also scheduled to participate in the service later this year.
Estimates from financial services consulting firm Broadridge indicate that blockchain technology is expected to shorten the settlement time of securities. This process would have taken more than two days to complete and reduce post-transaction expenditures. The industry's current cost of this expenditure Between $ 17 billion and $ 24 billion.