Paxos Pursues National Trust Bank Status Amid Stablecoin Expansion

Paxos, issuer of PayPal's PYUSD stablecoin, is making a renewed push for federal trust bank authorization. The $1 billion market cap stablecoin operator seeks oversight from the Office of the Comptroller of the Currency, following similar moves by Circle and Ripple in the digital asset custody space.

A successful application WOULD enable faster settlements and enhanced asset management capabilities under national supervision. The proposed charter differs from traditional banking licenses—focusing exclusively on custody and payment processing while prohibiting deposit-taking or lending activities.

The company previously operated under a New York state trust charter and received conditional federal approval in 2021 that later expired. Industry observers note this regulatory upgrade could bolster institutional confidence in Paxos' stablecoin operations and custody services.