Bank of America’s partnership with Paxos means that transactions can be completed on the same day

The second largest bank in the US uses blockchain technology to process stock transactions.

According to a Bloomberg story today, Bank of America has joined the Paxos Settlement Service, a platform that allows same-day deals using blockchain technology. Kevin McCarthy, Chief of Finance and Compensation, said the bank “The company has been conducting internal operations for several months,” and has been offering the service of Bank of America customers as a clearing house upon approval.

The measure appears to allow for a stock liquidation system “more flexible and faster” compared to that of the Depository Trust Clearing Corporation or DTCC, of which Bank of America is a direct participant. DTCC settlement time is approximately two days while the Paxos service can process some stock trades in minutes.

Bank of America’s partnership with Paxos means that transactions can be completed on the same day
Bank of America’s partnership with Paxos means that transactions can be completed on the same day

“We can determine the billing cycle up to T + 0”, McCarthy said. “Then we can release the guarantees that we would have to make from one day to the next […] The return on investment in this business would improve which was a challenge. “

Paxos officially launched its stock settlement service in 2019 after the Securities and Exchange Commission issued an exemption for the failure. Credit Suisse, a financial institution based in Zurich and Instinct, the commercial wing of Nomura Holdings, They took part in the pilot and liquidated trading in listed US stocks on the same day.

The stablecoin operator announced in April that it had applied for a clearing agency license with the SEC. Paxos recently closed a $ 300 million financing round that raised its valuation to $ 2.4 billion.

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