Paxos, a regulated blockchain infrastructure platform, is partnering with asset manager State Street to integrate State Street’s custodial services into the Paxos Settlement Service.
Paxos Settlement Service is a blockchain solution designed to allow two parties to safely settle securities trades through a modern clearing agency. By leveraging Paxos Settlement Service for institutional settlement, State Street was able to send settlement instructions to Paxos while still delivering the required messaging to interface with existing settlement systems. Also, the platform is ready to immediately deliver T+0 settlement for industry participants, while the legacy infrastructure has a goal of achieving T+1 settlement in 2024.
“The Paxos Settlement Service will revolutionize core market operations as our modern infrastructure improves efficiency, reduces risk, increases innovation, and provides transparency,” Charles Cascarilla, CEO and co-founder of Paxos, said. “State Street is a market leader, and their ability to easily integrate demonstrates how the Paxos platform is interoperable with today’s systems and creates a pathway to the digital world. Market participants need an environment that fosters faster, safer, fairer, and more open markets. Paxos technology shows how competitive clearing solutions can positively drive the market forward.”
Paxos technology allows for continuous netting and settlement without the delays and inflexibility of the legacy system’s batch processing. Further, Paxos has a safe, efficient, and transparent margin calculation, so there are no surprises to market participants.
“Our team is incredibly pleased to have collaborated with Paxos, Credit Suisse, as well as State Street’s Alpha team on this exciting industry initiative to facilitate seamless same day (T+0) settlement,” Nadine Chakar, head of State Street Digital, said. “State Street Digital was created to help drive innovation and address the industry’s digital transformation, and this pilot is consistent with our firm’s broader focus on supporting clients across the front, middle, and back office. It also further validates that the use of blockchain technology will help automate the life cycle of a trade, reduce costs, and could eliminate the need for the traditional reconciliation processes used in today’s settlement environment.”