Stablecoin Issuer Paxos Follows Circle and Ripple in Applying for US Banking License

Stablecoin and tokenization firm Paxos has filed an application with the Office of the Comptroller of Currency (OCC) for a national trust charter, the firm announced on Monday. 

If approved, the application will upgrade the firm’s existing New York Department of Financial Services (NYDFS) charter, allowing it to conduct business across the United States. 

“The OCC is the preeminent global regulator of banks. Paxos believes national designation will unlock new opportunities for growth and efficiency while being held to the highest standards of oversight,” a Paxos spokesperson told Decrypt.

“Approval of the application would bring Paxos under federal oversight and allow us to offer more rigorous, efficient solutions to customers at a crucial time when stablecoin legislation finally exists at the federal level,” they added.

Paxos’ move follows previously announced national bank charter applications from stablecoin firm Circle and Ripple. The applications come on the back of improved regulatory clarity around stablecoins with the signing of the GENIUS Act and the OCC’s May announcement that allowed national banks to manage, buy, and sell crypto assets under their custody. 

“We have brought greater sophistication to our operations to offer tailored products to the world’s biggest financial companies. As such, we believe we can better achieve our mission and support our customers’ goals via a national charter,” the Paxos spokesperson said. 

Last week, Paxos settled charges related to the launch of a Binance stablecoin (BUSD) which was illegally utilized by U.S. customers. The firm paid $26.5 million to New York State to resolve the matter. 

Based in New York, Paxos issues stablecoins like PayPal’s PYUSD and PAXG. It boasts Mastercard, Interactive Brokers, and MercadoLibre as users of its tokenization, custody, and trading services.