Paxos seeks approval to become fully-regulated crypto bank

The stablecoin issuer and PayPal partner wants to increase its range and scope of services by becoming the first crypto services provider to be regulated at both state and federal levels.

Stablecoin creator and crypto services provider Paxos filed an application to open a national bank on Wednesday. If approved, the pioneering Paxos General Trust will be headquartered in New York, licensed to hold cryptocurrencies and execute the duties of a regular trust bank.

According to a blog post on the Paxos website, being granted a national trust bank charter from the U.S. government would broaden both the range of services offered by the company and the geographic area to which it can offer services:

“Our mission is to modernize financial market infrastructure and enable the movement of any asset, any time, in a trustworthy way. A national Trust Bank charter would help us realize our goal by enabling us to serve customers across the country in the most efficient way.”

If approved, the application would mark the first time that a steward of digital assets was regulated at both the state and federal levels within the U.S. One of the first companies to receive New York State’s coveted BitLicense, Paxos is already regulated by the state’s Department of Financial Services (NYDFS). In 2015, the company — then known as ItBit — became the first “virtual currency” services provider to receive a charter from NYDFS.

In October, Paxos partnered with PayPal to provide trading and custodial services related to cryptocurrencies supported by the payments giant. “PayPal’s selection of Paxos is a reflection of New York’s status as the gold standard for cryptocurrency regulation,” said Paxos CEO Charles Cascarilla in a press release about the partnership announcement.

In addition to providing services for PayPal, Paxos continues to operate the ItBit exchange, offer crypto brokerage services, and maintain stablecoins PAX, BUSD and PAXG. The company was founded in 2012, has offices in New York, London and Singapore, and employs around 150 people.

Digital asset custodian Anchorage also applied for a federal charter last month.

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