- Paxos applies for U.S. national trust bank license.
- Aims for federal oversight and expansion.
- Impact on stablecoin issuer and custodian.
Paxos Trust Company has applied for a U.S. national trust bank license, joining Circle and Ripple, aiming for expanded oversight by the Office of the Comptroller of the Currency.
This move could enhance Paxos’ operational reach under federal oversight, potentially impacting market trust in its services and partnerships, including its role as issuer of PayPal USD.
Paxos Trust Company has applied for a U.S. national trust bank license, reinforcing its commitment to federal oversight. This move follows the lapse of a prior conditional approval from the Office of the Comptroller of the Currency (OCC).
The key players in this process include Paxos, led by CEO Charles Cascarilla, and the OCC. Paxos aims to convert its New York limited purpose trust charter to a national trust bank charter.
The application aims to impact Paxos’ operations significantly, especially as the issuer and custodian for major stablecoins like PYUSD. Federal oversight from the OCC could enhance its operational scope.
The financial landscape might experience shifts, mainly in the cryptocurrency sector where Paxos operates as a custodian. The move reflects a broader strategy for greater regulatory alignment. “OCC oversight will help build on our historic commitment to maintaining the highest standards of safety and transparency.”
The possible outcomes of Paxos’ charter application include broader access to federal compliance and expanded custodial services. Potential changes hinge on the regulatory response and Paxos’ adherence to the pre-opening requirements set by the OCC.
The company’s strategy signifies industry trends where crypto firms are pursuing national charters for consistent regulatory frameworks. This aligns with historical precedents where firms such as Anchorage Digital have secured similar authorizations.
