Paxos Seeks U.S. National Trust Bank Charter Amid Growing Crypto Industry Trend
By Hannah Lang, Reuters – August 12, 2025
In a notable development within the cryptocurrency sector, Paxos Trust Company, the firm behind PayPal’s stablecoin PYUSD, has officially submitted an application to establish a national trust bank in the United States. This move positions Paxos alongside several other digital asset companies pursuing trust bank licenses as they aim to deepen their engagement with the traditional financial system.
A Strategic Step into Regulated Banking
If approved by the U.S. Office of the Comptroller of the Currency (OCC), Paxos would gain authority to hold and manage assets on behalf of customers and facilitate faster payment settlements. However, unlike conventional banks, the charter would not permit Paxos to accept cash deposits or issue loans. The company plans to convert its current limited purpose trust charter, held with the New York Department of Financial Services, into a federally regulated charter under OCC supervision.
According to sources familiar with the application, the charter would not alter Paxos’ core business operations but would provide the "highest level of regulatory oversight" in the U.S., lending greater credibility and global recognition to its activities.
A Renewed Pursuit Following Earlier Efforts
Paxos previously sought a national trust bank charter in 2020 and received preliminary conditional approval from the OCC in 2021. However, that application ultimately stalled and expired in 2023 without final authorization. Currently, Anchorage Digital holds the sole national trust bank charter among digital asset firms.
The recent surge in trust bank license applications also includes other prominent crypto players. Stablecoin issuer Circle and blockchain payment company Ripple submitted their applications last month, reflecting the industry’s drive toward regulatory integration.
Paxos’ Role in the Stablecoin Ecosystem
Paxos provides blockchain infrastructure and stablecoin issuance services to businesses and is the issuer of several stablecoins, including PayPal’s PYUSD. With a market capitalization exceeding $1 billion, PYUSD exemplifies the growing use of stablecoins, cryptocurrencies pegged to stable assets like the U.S. dollar, widely used to enable quick and reliable digital transactions.
The passage last month of U.S. legislation establishing a clear regulatory framework for stablecoins marks a significant milestone. The law, signed by former President Donald Trump, was the culmination of extensive industry lobbying. Crypto advocates, including substantial campaign contributions surpassing $245 million in recent elections, played a central role in advocating for the measure. Experts suggest this regulatory clarity could accelerate the adoption of digital assets as common tools for payments and money transfers.
Past Challenges and Recent Settlements
Paxos has faced regulatory challenges, including a 2023 New York directive that forced the company to cease issuing the Binance USD (BUSD) stablecoin after a partnership with Binance, the world’s largest cryptocurrency exchange. Paxos subsequently ended its collaboration with Binance.
Last week, Paxos agreed to a $48.5 million settlement resolving New York Department of Financial Services charges related to inadequate oversight of illegal activities connected to Binance. This development followed Binance’s former CEO pleading guilty to U.S. anti-money laundering violations as part of a $4.3 billion settlement with U.S. authorities in 2023. Industry Outlook
As the cryptocurrency sector seeks legitimacy and broader market participation, securing national trust bank charters represents a strategic avenue for firms to enhance regulatory compliance and customer trust. Paxos’ renewed application underscores the consolidation efforts by crypto companies to operate under clear federal oversight while maintaining innovative digital asset services.
Hannah Lang covers financial technology and cryptocurrency for Reuters. She is based in Washington, D.C.
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