Paxos Trust Company, known for its role in supporting PayPal's stablecoin, has revealed plans to apply for a national trust bank charter in the US.

This initiative reflects a broader movement among cryptocurrency companies seeking to integrate more closely with established financial systems.

If the US Office of the Comptroller of the Currency (OCC) grants the charter, Paxos would be authorised to manage and hold customer assets, enabling quicker payment settlements.

However, this licence would not permit Paxos to accept cash deposits or issue loans, setting it apart from traditional banking institutions.

The proposed change would involve Paxos converting its existing limited purpose trust charter from the New York Department of Financial Services (NYDFS) to a federal charter under the OCC.

Since its inception in 2015, Paxos has operated under the supervision of the NYDFS, becoming the first blockchain and tokenisation firm to receive a limited purpose trust charter and launching the first regulated stablecoin in 2018.

Paxos CEO and co-founder Charles Cascarilla said: “By applying for a national trust bank charter, we are continuing to offer enterprise partners and consumers the safest, most trusted infrastructure available.

“This is rooted in our belief in the transformative power of blockchain as a force for financial freedom. OCC oversight will help build on our historic commitment to maintaining the highest standards of safety and transparency.”

Paxos noted that all assets issued by the company will continue to be fully backed by reserves that are bankruptcy-remote, held in US dollars, US Treasuries, and cash equivalents, thereby guaranteeing a 1:1 redemption rate.

The company has also indicated that customers can anticipate a smooth transition and uninterrupted service as it embarks on this new phase of federal oversight.

"Paxos seeks national trust bank charter in US" was originally created and published by Retail Banker International , a GlobalData owned brand.

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