Paxos Doubles Down: Reapplies for U.S. National Trust Bank Charter in Bold Regulatory Play
Paxos isn't backing down from the regulatory fight. The crypto infrastructure giant just refiled its application for a U.S. national trust bank charter—a move that could rewrite the rules of crypto banking.
Wall Street's watching closely as this could become the blueprint for how crypto companies operate within the system while telling the system to get with the times.
One cynical take? They'll need this charter just to handle all the paperwork coming from Washington.
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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