Paxos Moves Towards Becoming a National Trust Bank
Paxos, a leading issuer of regulated stablecoins like Pax Dollar (USDP) and PayPal USD (PYUSD), has filed for regulatory approval with the Office of the Comptroller of the Currency (OCC) to convert its New York Department of Financial Services (NYDFS) trust charter into a national trust bank charter.
This move would allow Paxos to expand its services, including the ability to manage and hold assets on behalf of its customers, accept cash deposits, and offer loans under the appropriate regulations. The shift also reinforces Paxos’ commitment to regulatory compliance, a stance it has maintained since its inception.
Why the Move Matters for Paxos and the Crypto Industry
The company’s application to become a national trust bank is a significant step in the evolution of blockchain and stablecoin services. According to Paxos CEO Charles Cascarilla, the new charter would enhance the safety and infrastructure provided to both enterprise partners and consumers. It would also enable Paxos to operate under federal regulation, which ensures a higher level of transparency and security.
“Paxos has set the bar for regulatory oversight and compliance over the last decade,” said Cascarilla. “By applying for a national trust bank charter, we continue to offer the safest infrastructure available.”
Paxos first obtained a limited trust charter from NYDFS in 2015, making it the first blockchain firm to do so. Though its first national bank license application was filed in 2020 and granted preliminary approval in 2021, it was ultimately stalled and expired in 2023. This renewed application reflects Paxos’ commitment to maintaining the highest standards in financial services.
A Growing Trend: Circle and Ripple Pursue Banking Licenses
Paxos is not the only digital asset platform pursuing a national trust bank charter. Circle, the issuer of the USDC stablecoin, and Ripple, the company behind XRP, have also filed for banking licenses. Currently, Anchorage Digital is the only U.S.-based digital asset platform with a national trust bank charter, highlighting the competition among top firms in the blockchain space to gain access to the financial sector’s regulated infrastructure.
Paxos’ application is a significant milestone for the company, but it is also part of a broader trend of blockchain companies seeking greater legitimacy within traditional financial services.
Global Regulatory Oversight and Expansion Plans
Paxos has worked hard to build a robust regulatory framework for its operations, with milestones achieved not only in the U.S. but also across Europe and Asia. The company has obtained regulatory approvals from authorities like the Finnish Financial Supervisory Authority, the Monetary Authority of Singapore, and the Abu Dhabi Global Market’s Financial Services Regulatory Authority.
Paxos’ move to apply for a national trust bank charter is another step in its strategic expansion and positioning as a leader in the evolving digital asset industry.
