- Paxos has filed for a banking charter with the U.S. Office of the Comptroller of the Currency
- The broker, which is being used by PayPal to back their cryptocurrency platform, said it was “excited about the benefits” a banking charter could provide
- Paxos praised the NYDFS as a “pioneering regulator”
Paxos, the crypto brokerage firm backing PayPal’s cryptocurrency venture, has announced that it has filed for a national trust bank charter. The U.S. company posted the announcement Wednesday, giving their reasons for the application in a blog post, stating that achieving such an award would expand their reach and help them serve customers nationwide more effectively.
Paxos Bigs Up the NYDFS
The blog post announcing the move was penned by Dan Burstein, General Counsel and Chief Compliance Officer at Paxos, who expressed the company’s excitement about “the benefits a national Trust Bank charter can bring to our business, operations and customer service”, stating that a bank charter would “help us realize our goal by enabling us to serve customers across the country in the most efficient way.”
In an interesting move, Burstein says that Paxos has been “fortunate to have a pioneering regulator like the NYDFS”, referring to the New York State Department of Financial Services, whose odious BitLicense has come in for heavy criticism from a wide variety of crypto companies since its implementation in 2015.
Indeed, much of the first third of the Paxos statement is a love letter to the NYDFS, which is reminiscent of a captured spy being forced to write that he is being well treated by his captors.
Award Would Increase Crypto Trust and Acceptance
When the statement does finally return to the subject at hand, Paxos talks about the benefits of the banking license, stating that its purpose is to “allow banks to conduct business across state lines more easily”. This flexibility, it adds, would allow it to “operate across the US while continuing to adhere to the highest regulatory standards.” No doubt that’s exciting to someone.
Paxos threatened get more specific about what a banking charter actually means, only to veer away from the opportunity:
For Paxos, it’s beneficial to hold trust charters from both the preeminent state (NYDFS) and national (OCC) banking regulators. This will further support our approach to innovation within regulation and drive important long-term benefits for our clients.
Having worked with the NYDFS so closely to this point, it is hard to believe that Paxos won’t be granted their banking charter, a move which will admittedly represent another step towards mainstream adoption for cryptocurrency entities.