Paxos seeks US trust bank license from OCC

Paxos, a leading regulated stablecoin issuer and blockchain-based tokenization platform, has formally applied for regulatory approval to operate as a national trust bank in the United States. The move marks a strategic shift from its current New York Department of Financial Services (NYDFS) trust charter toward broader federal oversight.

Transition from State to Federal Oversight

The company, which issues both Pax Dollar (USDP) and PayPal USD (PYUSD) stablecoins, has submitted its application to the Office of the Comptroller of the Currency (OCC). If approved, Paxos would gain the authority to manage and safeguard client assets at a national level, accept cash deposits, and offer loans in compliance with federal regulations.

CEO and co-founder Charles Cascarilla emphasized that Paxos has spent over a decade building a strong reputation for regulatory compliance and transparency. “By applying for a national trust bank charter, we’re reinforcing our commitment to providing the most secure and trusted infrastructure for both enterprise clients and consumers,” Cascarilla said.

Regulatory History and Strategic Goals

Paxos made history in 2015 as the first blockchain firm to receive a limited-purpose trust charter from NYDFS. The company initially sought a national bank charter in 2020 and received preliminary conditional approval in 2021, but the application expired in 2023 before finalization.

Cascarilla explained that the renewed push is grounded in Paxos’ belief in blockchain’s transformative potential for financial freedom. He noted that OCC oversight would complement the company’s existing international regulatory licenses, which include authorizations from the Finnish Financial Supervisory Authority, Monetary Authority of Singapore, and Abu Dhabi Global Market’s Financial Services Regulatory Authority.

Industry Context and Competitive Landscape

Paxos’ new application comes as other major digital asset firms pursue similar paths. Circle, issuer of USDC, and Ripple, creator of the XRP cryptocurrency and Ripple USD stablecoin, have also applied for national trust bank charters. Currently, Anchorage Digital remains the only U.S.-based digital asset platform with such a license.

The shift toward bank-like regulation reflects a broader industry trend where stablecoin issuers and crypto infrastructure providers seek to align more closely with traditional financial standards. For Paxos, securing a national trust charter would not only expand its operational reach but also strengthen trust with regulators, institutional partners, and retail customers alike.