US Broker Wedbush Joins Paxos’ Equities Settlement Network

It has become the first participant to opt for blockchain-based settlement.

Wedbush Securities, a United States investment firm with over $20 billion in assets under management, announced on Thursday that it has joined the blockchain-based stock settlement network developed by Paxos.

Paxos Settlement Service is a private and permissioned blockchain that allows participants to settle trades on any time cycle. On legacy US infrastructure, equity trade settlements take an additional two days after the execution day, and for same-day settlements, trades have to be executed before 11 am (Eastern Time).

“Wedbush has long been an innovator in securities clearing services,” Wedbush CEO, Gary Wedbush, said in a statement. “It’s crystal clear that Blockchain technology is destined to completely modernize securities settlement and custody. Paxos is way out in front in the evolution, and we are thrilled to be on board with this exciting new platform.”

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Its equities settlement network was joined by Credit Suisse, Nomura’s Instinet, Societe Generale and the Bank of America. Though a few more companies can join the network after the addition of Wedbush, it cannot take more than seven participants, according to the no-action relief received from the US Securities and Exchange Commission in 2019.

Meanwhile, Paxos revealed that it will apply for a full clearing license in the United States and grow its settlement network size. Finance Magnates earlier reported on Paxos’ intention of becoming a US national bank.

“US equities settlement is opaque and relies on outdated technology,” said Charles Cascarilla, Co-Founder and CEO at Paxos. 

“The Paxos Settlement Service reduces risk, enables greater trading liquidity and provides ownership transparency, which will revolutionize securities markets. We’re pleased Wedbush is joining our pilot program and believe their participation will facilitate important network benefits for all participants.”

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