The application follows regulatory scrutiny and a $48.5M settlement over Binance-linked compliance failures, as well as new U.S. stablecoin legislation signed by Trump in July.
Paxos Trust Company, the cryptocurrency firm behind PayPal’s stablecoin, has applied to become a national trust bank in the United States. This move places the company among several digital asset firms aiming to strengthen their presence in the traditional banking system.
If the U.S. Office of the Comptroller of the Currency (OCC) approves the application, Paxos would be allowed to hold and manage customer assets under federal oversight and process payments more efficiently. The license would not allow the company to accept traditional cash deposits or issue loans, distinguishing it from conventional banks.
The firm currently operates under a limited-purpose trust charter granted by the New York Department of Financial Services. If the national charter is approved, Paxos would shift to a federal charter overseen by the OCC. According to a Reuters’ source familiar with the plans, this change would not alter Paxos’s business model but would provide the “highest level of regulatory oversight,” which the source said carries significant weight both in the U.S. and internationally.
This is not Paxos’s first attempt to obtain such a license. The company first applied for a national trust bank charter in 2020 and received preliminary conditional approval from the OCC in 2021. However, the process stalled, and the application expired in 2023.
Paxos joins Circle and Ripple in push for OCC approval
Currently, Anchorage Digital is the only digital asset company holding an active national trust bank charter. The OCC’s decision on Paxos comes as other firms are also seeking the same status. Last month, stablecoin issuer Circle and cryptocurrency company Ripple submitted their own applications.
Paxos provides blockchain infrastructure and stablecoin solutions for businesses. It also issues several stablecoins directly, including PayPal’s PYUSD, which currently has a market capitalization of more than $1 billion.
Stablecoins are a type of cryptocurrency designed to maintain a consistent value, most often pegged to the U.S. dollar at a one-to-one ratio. They have become an important tool for cryptocurrency traders moving between tokens and are increasingly seen as a method for near-instant payment transfers.
Their adoption has grown rapidly, and the sector recently saw a major regulatory development.
In July, U.S. President Donald Trump signed a law establishing a federal framework for stablecoins. Supporters say the measure could help integrate them into everyday payments and money transfers. The legislation followed years of lobbying by the cryptocurrency industry, which, according to Federal Election Commission data, contributed more than $245 million to pro-crypto candidates, including Trump, during last year’s election cycle.
Past partnership with Binance under scrutiny
Paxos has previously collaborated with major players in the digital asset industry. It partnered with Binance, the world’s largest cryptocurrency exchange, to develop and distribute the Binance USD stablecoin.
That relationship has remained under regulatory scrutiny. Last week, Cryptopolitan reported that Paxos agreed to a $48.5 million settlement with New York regulators over claims that it failed to sufficiently monitor for illegal activities linked to Binance. This followed a broader enforcement action in which Binance’s former chief executive admitted to violating U.S. anti-money laundering laws, resulting in a $4.3 billion settlement in 2023.
The OCC’s decision on Paxos’s application will determine whether the company joins Anchorage Digital as one of the few digital asset firms with a federal trust bank charter. For Paxos, the license could offer increased legitimacy and regulatory oversight while maintaining its focus on blockchain services and stablecoin issuance.
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