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Paxos, the issuer of the stablecoin, filed with the SEC to become a US clearing house

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Clearing companies are intermediaries in the U.S. securities market that facilitate the payment and transfer of funds for securities transactions.

Paxos, the stablecoin issuer and cryptocurrency trading platform, filed with the US Securities and Exchange Commission (SEC) to become a clearing house on February 24, Blockbeats reported.

Clearing companies are intermediaries in the U.S. securities market that facilitate the payment and transfer of funds for securities transactions. If approved, Paxos would become one of the few clearing firms in the US, joining the American Depositary Trust Corporation, Options Clearing Corporation and others.

Charles Cascarilla, chief executive and founder of Paxos, said Tuesday that the company had hoped to become a full-blown clearing house. Paxos already trades its shares in the United States.

The exact timing of Paxos' filing has not been set, but after the filing, the Securities and Exchange Commission is likely to release the filing for public comment.

Cascarilla also raised the idea that blockchain-based clearing systems might be more efficient than the current market infrastructure.

"The GameStop issue highlights how the blockchain infrastructure has helped us solve many of the problems in the marketplace," he said, referring to the community-driven rise in GameStop's stock price last month. Several brokerages that offer trading in GameStop had to suspend trading in the stock because of market volatility caused by rising costs for clearing firms. Some attribute this to the settlement time mechanism now known as T+2. T+2 means that, under the current system, the transaction is settled by DTCC (the parent company of DTC) two days after the transaction is completed,

The blockchain network allows companies to know exactly "who owns what and when," Cascarilla said, referring to T+0, or same-day settlement. However, this is a vision at the moment, and blockchain is not yet a suitable tool for this work.