Paxos, Issuer of PayPal Stablecoin, Renews Bid for Top-Tier U.S. National Trust Bank Charter
NEW YORK – Paxos Trust Company, the prominent cryptocurrency firm behind PayPal’s PYUSD stablecoin, has announced it is reapplying to become a nationally chartered trust bank in the United States. The move signals a renewed push by the digital asset company to secure a stronger position within the traditional U.S. financial system.
If granted by the U.S. Office of the Comptroller of the Currency (OCC), the national trust bank charter would significantly enhance Paxos’s capabilities. It would permit the company to hold and manage customer assets and settle payments more rapidly on a federal level. Unlike a traditional bank, however, the specialized license would not allow Paxos to take customer deposits or issue loans.
This new federal charter would replace Paxos’s current limited purpose trust charter with the New York Department of Financial Services (NYDFS). According to a source familiar with the matter, this transition would provide the “highest level of regulatory oversight… that carries more weight in the U.S. and globally,” bolstering the company’s credibility and operational scope.
This is Paxos’s second attempt to secure this coveted charter. The firm first applied in 2020 and received preliminary conditional approval from the OCC in 2021, but the application eventually expired in 2023.
The move comes at a pivotal time for the digital asset industry. Paxos joins other major crypto firms like Circle and Ripple, which also applied for national trust bank charters last month. Currently, crypto platform Anchorage Digital is the only digital asset company to have successfully obtained a national trust bank charter, highlighting the significance of such an approval.
Paxos is a key infrastructure provider in the crypto space, issuing several stablecoins and offering blockchain solutions to businesses. Its most notable product is PayPal’s stablecoin, PYUSD, which has surpassed a market capitalization of $1 billion.
The application is further supported by a shifting legislative landscape. A recently signed U.S. law has established a new regulatory framework for stablecoins—cryptocurrencies pegged 1:1 to a stable asset like the U.S. dollar. Experts believe this milestone could pave the way for stablecoins to become a mainstream tool for daily payments and money transfers.
While this application marks a step forward, Paxos recently settled past regulatory issues. Last week, the company reached a $48.5 million settlement with New York over charges of failing to properly police illegal activity related to its former partner, Binance. This followed a 2023 order from New York regulators for Paxos to cease issuing the Binance USD (BUSD) stablecoin.
