The Paxos Trust Company, the Crypto infrastructure company behind PayPal’s piusd stablecoin, has filed to convert the New York Limited-Purpose Trust Charter to a US National Trust Bank Charter, which renews an effort that expired in 2023.
If approved, the federal charter, issued by the Currency (OCC) Comptroller’s office (OCC), will allow Paxos to take care of customer assets and improve payments nationwide under federal supervision, which potentially boost its appeal to institutional clients. Unlike traditional banks, a National Trust Bank may not receive cash deposits or issue loans.
“OCC Oversight will help develop our historic commitment to maintaining the highest standards of safety and transparency,” Paxos co-founder and CEO Charles Cascarilla Says In a statement.
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Paxos’ 2021 Federal Charter Approval Expires before launching
Paxos had previously applied for a charter in December 2020 and received an initial approval of the condition from Occ In April 2021. Green Light allowed the company to begin meeting a series of pre-opening requirements, including capital, compliance and operating benchmarks.
However, under OCC rules, approved conditions will expire if the bank is not opened within 18 months, unless expanded. Paxos approved lapsed On March 31, 2023.
During that time, Paxos continued to run under New York Limited Trouble Charter 2015. At this time, the company said it remained committed to chasing the federal administration when the conditions were correct.
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Regulatory setbacks and penalties associated with Binance
Paxos did not say why its first charter in OCC expired, but the regulation pressure was mounted at that time.
In February 2023, the New York Department of Financial Services (NYDFS) ordered Paxos to stop the release of Binance The USD in compliance concerns, which puts the company under increased investigation and forces it to end its relationship with Binance.
That investigation ended last week, when the NYDFs reached a $ 48.5 million regulating along with paxos It was a failure to promote the provisions of anti-money laundering in cooperation with Binance.
According to a announcement On Thursday, Paxos will pay the New York state $ 26.5 million fine, and provide another $ 22 million to upgrade the compliance program.
Paxos’s changed bid will come just a few weeks after the Genius Act has established the first federal framework for Stablecoin providers. It also follows a wave of recent charter applications from Other who gave up stablecoinincluding ripple and Circle.
Magazine: Bitcoin vs Stablecoins Showdown Looms while the Genius Act is near
