Paxos Becomes Latest Crypto Firm to File for Federal Bank Charter
Stablecoin issuer and crypto services firm Paxos has filed to become a federally regulated bank in the U.S.
The bank would operate out of New York (where Paxos is already located), according to the filing. The company, which already has a New York trust charter and a slew of licenses, currently offers cash custody, gold custody, cryptocurrency services, digital asset issuance, securities clearing, commodities trading and other services.
Notably, the firm’s crypto brokerage offering was tapped by PayPal earlier this year to power the payments giant’s cryptocurrency service.
“U.S. law is organized at both a state and federal level. The national charter was designed expressly to allow banks to conduct business across state lines more easily. This flexibility allows a young company like Paxos to focus resources on building great products. A national Trust Bank charter provides us with flexibility to operate across the U.S. while continuing to adhere to the highest regulatory standards,” General Counsel Dan Burstein said in a blog post.
As with BitPay, the application will see a 30-day comment period as the next step in the process before it can proceed, though there’s no guarantee it will be granted. However, Acting Comptroller Brian Brooks has said in public statements he would like to see fintech firms – like crypto companies – secure federal charters so they can more easily operate across the country.
Anchorage filed early last month for a federal charter, though the status of this application is unclear.
If approved, these companies would join Kraken and Avanti as some of the first crypto-native banks in the U.S., though the latter two secured state charters from the Wyoming Division of Banking rather than go the federal route.
UPDATE (Dec. 9, 22:55 UTC): This article has been updated with additional information.