Credit Suisse and Instinet Use Blockchain to Settle Trades on Same Day

The broker-dealer businesses of Credit Suisse and Nomura have settled US listed equities trades on a same-day settlement cycle on blockchain-based securities settlement platform Paxos according to a story in The Trade news. The exercise between Credit Suisse and Instinet occurred at 11am Eastern Time (ET) and settled at 4:30pm ET, demonstrating the ability for firms to execute and settle trades conducted throughout the day. The move comes at a polarizing time in the US equities market where experts and commentators have fiercely debated the merits of T+0 settlement versus T+1. DTCC has released a two-year industry roadmap for shortening the settlement cycle for US equities to one business day after the trade is executed.  However, Paxos has proclaimed that a more modern market infrastructure that utilizes blockchain technology will be able to overcome the inherent inefficiencies and costs in the trade lifecycle. Paxos Settlement went live with the service last year, with Credit Suisse and Instinet becoming the first two firms to join the platform. The New York-based company claims it marks the first live application of blockchain technology for the US equities market and enables the simultaneous exchange of cash and securities to settle trades. Paxos launched the service under no-action relief from the US Securities and Exchange Commission (SEC), and it hopes to secure full clearing agency registration this year.