Today Paxos announced the launch of the Paxos Settlement Service for commodities. The blockchain-based solution enables the simultaneous settlement of both the cash and commodity legs of a trade or delivery versus payment (DvP). So far, $1.5 billion of trades have been settled in the post-trade system, where participants include StoneX and Koch Metals Trading.
Previously Paxos unveiled a similar solution for stock trades in which Bank of America, Nomura’s Instinet, Credit Suisse and Societe Generale are system users. In 2019 the SEC gave Paxos a no-action letter to operate the stock settlement service on a limited basis through October 2021. The solution offers both same-day and two-day settlement without an early cut off time for same-day.
Both settlement solutions aim to address counterparty risk by using delivery versus payment.
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