Paxos, the stablecoin issuer and crypto services company has filed to become a federally regulated bank in the United States.
Paxos attempts to become a crypto bank regulated by the US authorities
According to a document released last week and dated December 8, Paxos is trying to create the Paxos National Trust by submitting an application to the Office of the Comptroller of the Currency (OCC).
In doing so, Paxos joins crypto payment company BitPay and custodian provider Anchorage in seeking federal regulation to operate as a bank. The bank would operate from New York (where Paxos is currently based), according to the document.
The company, which already has a New York fiduciary clearance and a number of licenses, currently offers cash custody, gold custody, cryptocurrency services, digital asset issuance, securities clearing, commodity trading, and other services.
Notably, the company's cryptocurrency offering was leveraged by PayPal (PayPal shares) earlier this year in support of the payment giant's new cryptocurrency-based service, which was launched nearly two months ago. The new services allow US citizens with a PayPal account to hold, trade or pay in cryptocurrencies within the company's network.
Paxos' request to "adhere to the highest regulatory standards"
“United States law is organized at both the state and federal levels. The national regulation was expressly designed to allow banks to conduct business across state borders more easily.
This flexibility allows a young company like Paxos to focus resources on creating great products. A National Trust Bank charter gives us the flexibility to operate in the United States, while continuing to adhere to the highest regulatory standards, ”legal counsel Dan Burstein said in a Twitter post.
As with BitPay, the application will see a 30-day waiting period for institutions to study and comment on the request before they can officially proceed, although there is no guarantee that the request will be fulfilled.
Recently, Acting Comptroller Brian Brooks publicly stated that he would like to see fintech companies, such as cryptocurrency companies, be able to obtain federal authorizations or licenses so that they can operate more easily across the country.
Anchorage filed a federal regulatory document earlier last month, although the status of this request is unclear. If approved, these companies would join Kraken and Avanti as some of the first crypto-native banks in the United States, despite the latter two having secured state approvals from the Wyoming Division of Banking rather than following the federal path.
