Paxos Trust Company, the crypto infrastructure firm behind PayPal’s PYUSD stablecoin, has reignited its pursuit of a US national trust bank charter following the expiration of its initial approval in 2023.
Originally granted conditional approval by the Office of the Comptroller of the Currency (OCC) in April 2021, Paxos did not meet the required timeline to launch the bank, causing their conditional approval to lapse in March 2023.
Today, we announced that we have filed an application to convert our NYDFS trust charter into a national trust charter under the Office of the Comptroller of the Currency.https://t.co/gVMdwteuLI
— Paxos (@Paxos) August 11, 2025
If granted, this federal charter would enable Paxos to custody customer assets and facilitate payments on a national scale under federal supervision, elevating its status particularly among institutional clients. However, unlike traditional banks, a national trust bank such as Paxos would be restricted from accepting cash deposits or issuing loans. Paxos CEO and co-founder Charles Cascarilla emphasized that oversight by the OCC will reinforce their dedication to maintaining top-tier safety and transparency standards.
Since the lapse of its OCC approval, Paxos has continued to operate under its New York limited-purpose trust charter, which it has held since 2015. However, regulatory challenges have intensified. In early 2023, the New York Department of Financial Services (NYDFS) ordered Paxos to halt issuing Binance USD, citing compliance issues, which effectively ended its collaboration with Binance. This culminated in a $48.5 million settlement earlier this month, including a $26.5 million fine and $22 million committed to upgrading Paxos’ anti-money laundering compliance programs.
Paxos’ renewed application arrives in the wake of the GENIUS Act, which for the first time lays out a federal framework governing stablecoin issuers. This move also aligns with a flurry of recent charter applications from other major stablecoin players such as Ripple and Circle. As federal regulatory landscapes solidify, Paxos aims to secure a nationally recognized banking status to better navigate regulatory demands and enhance trustworthiness across the digital asset ecosystem.
This development signals the growing institutionalization and regulatory clarity within the stablecoin space, a critical step that could widen adoption while enforcing stronger consumer protections in the evolving crypto industry.
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