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 Paxos Joins Other Crypto Firms in Applying for U.S. Trust Bank License

August 11, 2025 — Paxos Trust Company, the cryptocurrency company that helps run PayPal’s stablecoin, announced it is applying to become a national trust bank in the United States. This move follows several other digital asset companies that want to strengthen their position in the traditional financial system.

If Paxos gets approval from the U.S. Office of the Comptroller of the Currency (OCC), the company would be able to manage and hold assets for customers and process payments faster. However, this type of license would not allow Paxos to take regular cash deposits or give out loans like traditional banks do.

Currently, Paxos operates under a limited purpose trust charter from the New York Department of Financial Services. If approved, it would switch to a federal charter under the OCC. According to a source, this would give Paxos the “highest level of regulatory oversight” in the U.S. and internationally, making it more trusted around the world.

This is not Paxos’ first attempt at getting such a license. The company applied in 2020 and got preliminary approval in 2021, but the process stopped and the approval expired in 2023.

At the moment, Anchorage Digital is the only crypto company in the U.S. with a national trust bank charter. Recently, Circle, the company behind the USDC stablecoin, and Ripple also applied for the same license.

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Paxos is known for providing blockchain and stablecoin services to other businesses. It issues several stablecoins, including PayPal’s PYUSD, which has a market value of over $1 billion.

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What Are Stablecoins?

Stablecoins are a type of cryptocurrency that is designed to keep a steady value — usually linked 1:1 with the U.S. dollar. They are popular with crypto traders because they make it easy to move funds quickly between different cryptocurrencies. Supporters believe stablecoins could be used for everyday payments in the future.

Last month, U.S. President Donald Trump signed a new law to create rules for stablecoins. Experts say this could help make stablecoins a normal part of the payment system. The law was passed after years of lobbying by the crypto industry, which donated more than $245 million to pro-crypto political candidates during last year’s elections.

Past Challenges for Paxos

Paxos used to work with Binance, the world’s biggest cryptocurrency exchange, to issue the Binance USD (BUSD) stablecoin. But in early 2023, New York regulators ordered Paxos to stop issuing BUSD, leading to the end of that partnership.

Just last week, Paxos agreed to pay $48.5 million to settle charges in New York that it failed to properly prevent illegal activity connected to Binance. This settlement followed a major U.S. case in which Binance’s former CEO admitted to breaking anti-money laundering laws, leading to a $4.3 billion settlement in 2023.

If Paxos succeeds in getting its federal trust bank license, it would join a small but growing group of crypto companies officially recognized by the U.S. banking system.