Paxos Applies to Become Federally Regulated Crypto Bank

Jafrin  |  Dec 10, 2020

The issuer of stablecoin and crypto services provider Paxos has filed an application to become a federally regulated crypto bank in the United States. If approved, the firm will be licensed to hold cryptocurrencies while performing the regular duties of a trust bank. Crypto payment firm BitPay as well as crypto custody provider Anchorage too have joined Paxos to file for a federal charter to become a bank.

Paxos Wants to Become Federally Regulated Crypto Bank

As per a public document dated Dec. 8, Paxos is looking to create the Paxos National Trust. It has filed an application with the Office of the Comptroller of the Currency (OCC) to do so.

In an official blogpost, Dan Burstein, Paxos’ Chief Compliance Officer and General Counsel stated:

"We’re excited about the benefits a national Trust Bank charter can bring to our business, operations, and customer service. Our mission is to modernize financial market infrastructure and enable the movement of any asset, any time, in a trustworthy way. A national Trust Bank charter would help us realize our goal by enabling us to serve customers across the country in the most efficient way."

Paxos already has a New York trust charter and a number of licenses. The firm currently offers cash custody, gold custody, cryptocurrency services, digital asset issuance, securities clearing, commodities trading, and other services.

Crypto custody provider Anchorage had also applied for a federal charter. However, its status regarding the application is still unclear.

Paxos Powering Paypal's Cryptocurrency Service

Earlier this year, Paxos’ crypto brokerage offerings were tapped by Paypal for providing crypto service to the payment giant.

If the banking charters do get approved, these payment companies will join Kraken and Avanti to operate as crypto banks in the United States. Even though Kraken and Avanti received their state charter from the Wyoming Division of Banking, these firms want to secure banking charter at the federal level.

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