Paxos Files for OCC National Trust Bank Charter
Paxos Trust Company has resubmitted its application for a national trust bank charter with the US Office of the Comptroller of the Currency (OCC). The bid seeks to upgrade its New York state trust charter to a federal national trust bank charter. Its previous 2021 conditional approval lapsed in 2023. This move aligns with similar efforts by Circle’s USDC issuer and Ripple’s XRP to secure federal oversight.
The national trust bank charter would allow Paxos to manage customer assets, accept deposits, offer loans and provide faster payments and custody services under stricter oversight. Paxos, issuer of PayPal USD (PYUSD) and Pax Dollar (USDP), recently settled anti–money laundering violations with New York’s financial regulator. It paid $26.5 million and committed $22 million to bolster compliance. This step underscores growing stablecoin regulation and the rise of regulated crypto banking services in the US.
Neutral
While seeking an OCC national trust bank charter strengthens Paxos’s regulatory standing and could boost confidence in its stablecoins, stablecoins like PYUSD and USDP are pegged assets and unlikely to see price volatility from this development alone. In the short term, traders may note the positive compliance outcome but expect little immediate price movement. Over the longer term, federal oversight could support trust and adoption in Paxos’s stablecoins and crypto banking services, potentially benefiting the company but not affecting stablecoin peg stability.