Bank of America Joins Paxos To Allow Same-Day Trade Settlement

Bank of America, the second-largest bank in the US, haspartnered with Paxos Settlement Service. Through this partnership, Paxos allows same-day stock trade settlement using blockchain technology.

More so, Financing and Clearing Head Kevin McCarthy mentioned that in the past few months the bank has been organizing internal transactions. In addition, this could provide service to the clients of Bank of America upon approval like a clearing agency.

Moreover, this move would reportedly enable a speedier and flexible stock settlement system. The system is related to the Depository Trust & Clearing Corporation (DTCC) in which Bank of America is a direct participant. More so, the DTCC settlement time is two days approximately. In line with this, Paxos’ service is capable of settling a few stock trades in just a few minutes.

McCarthy said,

“We can determine the settlement cycle down to T+0…We then can free up the collateral we’d have to post on an overnight basis…The return-on-assets in this business would improve, which has been a challenge.”

In 2019, Paxos officially launched its settlement service for equity trades after getting no-action relief from the US Securities and Exchange Commission. More so, Credit Suisse is a Zurich-based financial institution and Instinet.  However, in which, the trading arm of Nomura Holdings, both participated in the pilot, settling US-listed stock trades on the same day.

Furthermore, the stablecoin operator announced in April that it had applied for a clearing agency license with the SEC. Recently, Paxos completed a $300 million funding round, which brought its valuation to $2.4 billion.

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Source: https://coinquora.com/bank-of-america-joins-paxos-to-allow-same-day-trade-settlement/