Stablecoin and tokenization company Paxos has announced that it has filed an application for a national trust charter with the Office of the Comptroller of Currency (OCC).
If Paxos gets its application approved, the company is set to upgrade its existing New York Department of Financial Services (NYDFS) charter, enabling it to conduct business across the US. According to Paxos, achieving national designation will provide it with additional opportunities for growth and efficiency while being held to high standards of oversight from the OCC. The approval will position the company under federal supervision and enable it to provide more optimal solutions to customers during a period when stablecoin legislation exists at a federal level.
Paxos’ national trust charter application comes just after stablecoin companies Circle and Ripple proceeded with similar moves. These initiatives follow improved regulatory clarity around stablecoin in the US, as the region just signed the GENIUS Act and the OCC announced that it enabled national banks to manage, buy, and sell crypto assets under their custody.
Paxos’ expansion throughout the US
Representatives from Paxos mentioned their company’s focus on augmenting its operations to provide personalised products to financial companies. Considering this, Paxos believes that it can better achieve its objectives and support its customers’ goals through a national charter. With its operations based in New York, Paxos issues stablecoins such as PayPal’s PYUSD and PAXG. Among the company’s users are Mastercard, Interactive Brokers, and MercadoLibre, which leverage its tokenization, custody, and trading services.
The news about the application for a national trust charter comes a week after Paxos agreed to pay a USD 48.5 million settlement over allegations from New York’s financial regulator that it failed to prevent illegal activity related to Binance. The regulator required Paxos to review Binance’s exposure to illegal activity, which found that from 2017 to 2022, approximately USD 1.6 billion of transactions from Binance’s platform involved malicious actors. Additionally, the regulator imposed a USD 26.5 million civil fine on Paxos, with the company also having to pay USD 22 million to upgrade its compliance programme.
