Paxos Trust Company, The Crypto Infrastructure Company behind Pyusd Stablecoin in Paypal, filed a file to convert its limited trust charter in New York into a charter of American national banking, renewing an effort that expired in 2023.
If it is approved, the Federal Charter, issued by the Currency Controller Office (OCS), would allow Paxos to hold customer assets and settle payments nationally under federal surveillance, which could stimulate its call to institutional customers. Unlike traditional banks, a national trust bank cannot accept cash deposits or offer loans.
“The OCC Outight will help to rely on our historic commitment to maintain the highest standards of safety and transparency,” said the co-founder and CEO of Paxos, Charles Cascarilla, in a press release.
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The approval of the Federal Charter of Paxos 2021 expired before the launch
Paxos applied for the first time for the charter in December 2020 and received the preliminary conditional approval of the OCS in April 2021. The green light allowed the company to start responding to a series of pre-opening requirements, including capital, compliance and operational references.
However, by virtue of the Rules of the OCC, conditional approvals expire whether the bank is not open within 18 months, unless prolonged. Paxos approval launched on March 31, 2023.
During this period, PAXOS continued to operate under her limited limited use trust charter, which she has held since 2015. At the time, the company said that she was determined to continue federal surveillance when the conditions were right.
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Regulatory reverse and penalties related to binary
Paxos did not say why his first charter with the OCC expired, but the regulatory pressure rose at the time.
In February 2023, the New York Department of Financial Services (NYDFS) ordered PAXOS to stop delivering USD binary on compliance problems, putting the company under an in -depth examination and forcing it to end its relations with Binance.
This examination culminated last week, when the NYDF reached a regulation of $ 48.5 million with Paxos so as not to defend the anti-flowage provisions in its partnership with Binance.
According to an announcement on Thursday, Paxos will pay New York to a fine of $ 26.5 million and will allocate an additional $ 22 million to upgrade its compliance program.
The renewed paxos offer comes just a few weeks after the engineering law established the first federal framework for stablecoin issuers. He also follows a wave of recent charter requests from other stablecoin issuers, notably Ripple and Circle.
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