Paxos Becomes Latest Crypto Firm to Pursue National Trust Bank Charter

Paxos Trust Company, the cryptocurrency firm behind PayPal’s stablecoin, has applied to become a US National Trust bank, making it the latest digital asset provider to pursue this status.

If approved by the Office of the Comptroller of the Currency (OCC), Paxos could hold and manage customer assets under federal oversight and process payments more efficiently. However, unlike traditional banks, it would not be permitted to accept cash deposits or issue loans.

The firm currently operates under a limited purpose trust charter issued by the New York Department of Financial Services. If approved, Paxos would convert this state-level charter into a federal charter regulated by the OCC.

Paxos said that applying for federal oversight aims to reflect its commitment to upholding the highest global standards of safety and transparency.

Charles Cascarilla, CEO and co-founder of Paxos, said: “For over a decade, Paxos has set the bar for regulatory oversight and compliance.

“By applying for a national trust bank charter, we are continuing to offer enterprise partners and consumers the safest, most trusted infrastructure available. This is rooted in our belief in the transformative power of blockchain as a force for financial freedom. OCC oversight will help build on our historic commitment to maintaining the highest standards of safety and transparency.”

This is not Paxos’s first attempt to secure a National Trust Bank license. The company initially applied in 2020 and received preliminary conditional approval from the OCC in 2021, but the process stalled, and the application expired in 2023.

With this move, Paxos has joined a growing trend of digital asset companies applying for the same license. Both Ripple and Circle also submitted applications for National Trust Bank charters last month.