• Tue. Oct 3rd, 2023

Paxos Seeks Approval for Becoming a Regulated Crypto Bank

Dec 10, 2020
the company filed the application and it is granted approval, the headquarters of the newly-established Paxos General Trust will be located in New York.

Creator of a stablecoin and a crypto services provider, Paxos has recently filed an application for launching a national bank. On Wednesday, the company filed the application and it is granted approval, the headquarters of the newly-established Paxos General Trust will be located in New York. This will allow the company to execute its duties in the same way as that of a regular trust bank and will also be provided with licenses that are required for holding cryptocurrencies. A blog post was made by Paxos itself regarding this application on its official website. The company explained in the post that if the US government issues a national bank trust charter, it would be immensely helpful for Paxos.

The company would be able to expand its geographical reach and the range of services it offers. Paxos highlighted in the blog post that modernizing the financial infrastructure as a whole was the company’s mission. This modernization would help Paxos in allowing the movement of any asset via trustworthy channels at all times. Hence, Paxos stated that a national Trust Bank charter was required for achieving this goal, and getting it would open up a lot of doors for the company. There hasn’t been any response to the application as yet and if it does get the green signal, it would undoubtedly be historical.

After all, it would be the first time that the US would regulate a digital asset steward at both state and federal levels. Paxos is also one of the first companies to have been granted the highly coveted BitLicense in the State of New York. Consequently, the company is regulated there by the Department of Financial Services (NYDFS). As a matter of fact, the company also has the honor of being the first provider of ‘virtual currency’ services to have gotten a charter by the NYDFS, which it got in 2015 when it had been known as ‘ItBit’. 

In October of this year, Paxos entered into a partnership with PayPal for providing trading and custodial services for cryptocurrencies, along with the payment giant. A public statement had been made about it by Charles Cascarilla in which it was highlighted how Paxos’ selection by PayPal is a testament to the importance of New York’s BitLicense in regard to crypto regulation. Not only does the company provide its services to PayPal, but it also owns a crypto exchange, which is called ItBit. 

Some of the other services that are provided by the company include maintaining the PAX, BUSD, and PAX stablecoins, along with offering crypto brokerage services. The company had been established in 2012 and had a total of 150 employees, with its offices spread across Singapore, New York, and London. However, it should be noted that Paxos is not the only firm that’s making such moves. A crypto custodian service called Anchorage had already applied for a federal charter last month. It will certainly not be the last headline that discusses big firms applying for a charter.

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