SEC approves Paxos subsidiary as clearing agency

Last Wednesday the SEC approved a Paxos subsidiary as a clearing agency. By Thursday the same event was being reported as “clearing US stocks”, “clearing and settling US securities”, and “settling securities nationwide”. None of those headlines is wrong. They are also using one word for three different functions.

PSSC got registered to run a depository and a settlement system. It is explicitly not a central counterparty. No novation, no default fund, participants face each other on credit. The most interesting thing in the order is the function that is not there, and the headlines miss it.

This week’s Clearing Gap is on why that conflation matters, and what it crowds out. Link in first comment.

This first appeared on LinkedIn on 5 June 2026. If you want to comment or discuss, that’s the place.