Bank of America has joined the Paxos Settlement Service, a platform using blockchain technology to achieve same-day settlement of stock trades.
The U.S. bank joins Swiss financial giant Credit Suisse and Japanese bank Nomura Holdings on Paxos Trust’s network, Bloomberg reported Monday.
Bank of America will offer the service to clients if it’s approved as a clearing agency, the bank’s head of financing and clearing Kevin McCarthy said.
“We can determine the settlement cycle down to T+0,” McCarthy said. “We then can free up the collateral we’d have to post on an overnight basis,” helping to improve the return on assets.
Paxos used its Ethereum-based system to achieve same-day settlement in partnership with Credit Suisse and Nomura trading arm Instinet in March.
Per the report, Paxos CEO Chad Cascarilla said his platform will put pressure on the Depository Trust & Clearing Corp. (DTCC), which currently dominates equity settlement. The DTCC can only offer same-day settlement if trades are recorded by 11 a.m. and generally it takes up to two days.
The news marks Bank of America as the latest Wall Street giant to be joining blockchain projects that promise to cut down the timescales and cost of trading operations. JPMorgan for example completed a live same-day trade between its broker-dealer and banking entity using its own stablecoin, JPM Coin, in December.