Paxos has filed with the U.S. Office of the Comptroller of the Currency (OCC) an application to obtain a national trust bank charter. If approved, the firm would become the first custodian of digital assets to be regulated as a “crypto bank” at both federal and regional levels.
According to the company’s blog, Paxos is today regulated by the New York State Department of Financial Services (NYDFS) as a trust company.
The licenses would enable offering cash custody and stablecoins services, trading cryptocurrencies through the company’s exchange itBit, and the issuance of stablecoins (notably PAX and BUSD with Binance). Paxos also has the right to use tokenized settlements for trading commodities and to provide certain fiduciary services.
In the Paxos application to the OCC, there are mentions of plans to focus only on part of the product lineup presented above with further expansion of activities “based on operational, financial and legal considerations”.
The document does not mention a partnership with PayPal, which enabled the launch of the payments arm of the cryptocurrency service.
“The OCC charter will enable us to realize our mission to modernize the infrastructure of the financial markets and ensure the reliable movement of any asset at any time,” commented Paxos’ Chief Counsel Dan Burstein.
In an interview with Forbes in November, OCC head Brian Brooks stressed that nationwide bank charters would allow crypto startups to operate at the federal level without the need to obtain a money-transmitter license (MTL).
Recall that in September and October the Wyoming State Banking Board granted the Bitcoin exchange Kraken and the cryptocurrency startup Avanti the status of a special-purpose depository institution (SPDI) with the functions of a traditional financial institution.
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