Paxos Resubmits U.S. National Trust Bank Charter Application

Paxos Trust Company has resubmitted its application for a U.S. national trust bank charter, aligning it with other major cryptocurrency firms like Circle and Ripple in their efforts to integrate more deeply into the traditional financial system. The proposed charter, if approved by the Office of the Comptroller of the Currency (OCC), would allow Paxos to operate under federal oversight and offer trust banking services, though it would not permit deposit-taking or lending [1].

Currently, Paxos operates under a limited-purpose trust charter issued by the New York Department of Financial Services. A national charter would elevate its regulatory oversight to a federal level, potentially enhancing its credibility both domestically and internationally. According to a source cited by Reuters, the change would not alter Paxos’s core business model but would provide the “highest level of regulatory oversight” [1].

This is not the first time Paxos has pursued this goal. It initially applied for a national trust bank charter in 2020 and received conditional approval from the OCC in 2021. However, the application lapsed in 2023. Now, with the broader crypto industry seeking regulatory clarity, Paxos has re-entered the process at a time when other firms are also pushing for similar approval [1].

Anchorage Digital is currently the only digital asset company with an active national trust bank charter. If approved, Paxos would join a select group of firms navigating the intersection of crypto and traditional finance. The move reflects a broader industry trend toward institutional legitimacy and regulatory compliance. By aligning with federal banking standards, crypto firms aim to reinforce trust in their services and expand their role in asset management and custody [2].

Paxos’s renewed application also follows increased scrutiny over its past partnerships. Most notably, it has faced regulatory challenges related to its collaboration with Binance, including a $48.5 million settlement with New York regulators over alleged compliance failures. These developments underscore the growing emphasis on oversight in the digital asset space [1].

The reapplication comes at a pivotal moment for the industry, as the U.S. government continues to shape its regulatory approach to stablecoins and digital assets. In July, President Donald Trump signed a law establishing a federal framework for stablecoins, a move seen as a step toward integrating them into mainstream financial systems. This development follows years of lobbying by crypto industry representatives, who have increasingly sought a formal place within the banking system [1].

If granted the charter, Paxos would gain a stronger foundation for its operations, including its role in issuing stablecoins like PayPal’s PYUSD. The company already provides blockchain infrastructure and stablecoin solutions to a range of businesses and has a market capitalization exceeding $1 billion for its stablecoins [1].

While the outcome remains uncertain, the application highlights the growing convergence between traditional finance and the digital asset sector. A successful application could serve as a model for other crypto firms seeking to operate within established regulatory boundaries, potentially reshaping the landscape of financial services in the U.S. [3].

Source:

[1] title: Paxos becomes latest crypto firm to seek U.S. National ... (https://www.cryptopolitan.com/paxos-becomes-latest-crypto-firm-to-seek-u-s-national-trust-bank-license/)

[2] title: newsfilter.io: Business & Financial News (https://newsfilter.io/)

[3] title: Why Eli Lilly Stock Popped Today (https://www.mitrade.com/insights/news/live-news/article-8-1030071-20250812)