Instinet, the Nomura-owned broker-dealer and Credit Suisse have settled U.S.-listed equity trades on a same-day timeframe while using Paxos’ blockchain-based settlement service.

Why should we care?
According to Paxos, the transaction is the first live application of blockchain technology for the U.S. equities market. With the legacy system, settlement can only occur the same day if trades are completed before 11:00 a.m. Eastern time, and is therefore “rarely utilized,” said Paxos. The same-day settlement transaction reportedly took place on March 4, between 11:00 a.m. and 3:00 p.m. The settlement timing occurred thanks to the use of the Paxos’ Settlement Service, which is a private, permissioned blockchain solution that allows two parties to bilaterally settle securities trades with one another. It is interoperable with legacy clearing systems. Paxos Settlement Service has been settling trades daily with a standard, two-day timeframe under no-action relief from the Securities and Exchange Commission (SEC) staff. Paxos said it plans to apply for full clearing agency registration with the SEC. “Innovation in blockchain technology is incremental. We’re excited to make progress in forging a path to faster settlement times at lower costs in public equities,” said Emmanuel Aidoo, head of digital assets markets at Credit Suisse, in a statement. This isn’t the first time Credit Suisse and Nomura Instinet have collaborated with Paxos: The two firms last year began using the Paxos Settlement Service in February 2020. Paxos, a regulated blockchain infrastructure company, uses technology to tokenize, custody, trade, and settle assets. Its customers include PayPal, Societe Generale, StoneX, and Revolut.