Cryptocurrency company Paxos joins the wave of digital asset firms seeking traditional banking licenses in the United States
Paxos Seeks National Trust Bank Charter for Enhanced Regulatory Oversight
Paxos Trust Company, a leading cryptocurrency firm, has reapplied for a national trust bank charter with the U.S. Office of the Comptroller of the Currency (OCC). This application comes after the company's initial application, conditionally approved in April 2021, expired in March 2023 due to failure to meet the OCC's 18-month operational deadline.
The new application, filed around mid-August 2025, places Paxos among several digital asset firms like Circle and Ripple seeking national trust charters. If granted, the charter would convert Paxos' limited purpose trust charter with the New York Department of Financial Services to a federal charter, allowing the company to manage and hold customer assets nationwide under federal oversight.
Stablecoins, a type of cryptocurrency designed to maintain a constant value, are commonly used by crypto traders to move funds between tokens. Paxos is a significant player in this field, issuing PayPal's stablecoin PYUSD, which has a market capitalization of over $1 billion. However, the charter does not permit Paxos to accept cash deposits or issue loans, focusing instead on custody and asset management aligned with its blockchain and stablecoin infrastructure.
The renewed effort follows regulatory developments such as the GENIUS Act, which establishes a federal framework for stablecoin issuers, requiring 1:1 backing by reserves and increased transparency. Obtaining this charter is expected to provide Paxos with the highest level of regulatory oversight under the OCC, enhancing credibility domestically and internationally. It will also simplify compliance compared to the patchwork state rules and increase institutional trust, facilitating its positioning as a legitimate player in the mainstream financial ecosystem for stablecoins and digital asset custody.
Notably, Paxos remains committed to maintaining full backing of its issued assets by bankruptcy-remote reserves in U.S. dollars, Treasuries, and cash equivalents. The use of stablecoins has grown rapidly in recent years, and proponents suggest they could be used to send payments instantly.
Last week, Paxos reached a $48.5 million settlement to resolve New York charges that the company failed to police illegal activity related to Binance. In early 2023, New York ordered Paxos to stop issuing Binance's stablecoin, and Paxos subsequently ended the partnership. Binance's former chief executive pleaded guilty to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement in 2023.
As of August 2025, Anchorage Digital is the only digital asset company with a national trust bank charter. The outcome of Paxos' new application is pending. If approved, Paxos could manage and hold assets on behalf of customers and settle payments faster, offering a more streamlined and efficient service in the rapidly growing stablecoin market.
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