Paxos pursues a trust charter from the Office of the Comptroller of the Currency
Paxos Seeks National Trust Bank Charter for Enhanced Regulatory Oversight
Paxos, a leading blockchain and tokenization company, has applied to convert its New York state trust charter into a national trust bank charter under the U.S. Office of the Comptroller of the Currency (OCC). This is Paxos’ second attempt, following the expiry of its earlier conditional approval in March 2023 due to failure to meet an operational deadline.
The national trust charter application places Paxos under federal regulatory oversight, complementing its existing multi-jurisdictional frameworks including FIN-FSA in Europe, MAS in Singapore, and FSRA in Abu Dhabi. This federal oversight aims to increase transparency and safety, streamline compliance, and enhance institutional legitimacy for the company.
The move is part of Paxos’ commitment to maintaining high regulatory standards for blockchain infrastructure and stablecoin issuance. By aligning its operations with a standardized, national regulatory regime, Paxos hopes to reduce regulatory uncertainty and foster trust among enterprise partners and consumers.
CEO Charles Cascarilla emphasized this move as part of Paxos’ dedication to providing “the safest, most trusted infrastructure” and “building on historic commitments to safety and transparency” through federal regulatory oversight by the OCC.
Paxos was the first blockchain and tokenization company to get a limited purpose charter and issued the first regulated stablecoin in 2018. Along with companies like Circle, Ripple, and Fidelity Digital Assets, Paxos has applied for a national trust charter to gain a stronger foothold in the integrated space of banking and digital assets.
The current status is that Paxos is actively pursuing approval but has not yet secured the national trust bank charter. This effort is expected to significantly enhance the company's regulatory standing and business advantages by providing unified, federal oversight that supports operational clarity, safety, and institutional confidence.
In a related development, the Guiding and Establishing National Innovation for U.S. Stablecoins Act became law on July 18, 2021, potentially paving the way for more crypto firms to seek federal banking authority.
Notably, the OCC has issued interpretive letters in 2025, including 1183 and 1184, that expanded national banks' ability to engage in crypto activities. Anchorage Digital Bank was the first crypto firm to receive a charter from the OCC in 2021.
However, regulatory scrutiny remains high in the crypto space. In 2023, both the SEC and CFTC filed lawsuits against Binance and Binance.US. The SEC alleged commingling and diversion of customer funds, while the CFTC claimed compliance evasion. Paxos was fined $26.5 million by the NYDFS for due diligence failures related to its relationship with former partner Binance and systemic shortcomings in Paxos' anti-money laundering program.
As part of the settlement, Paxos is required to invest an additional $22 million in its compliance program. Bryan Jacobsen, director of CRC-Oyster, notes that the OCC will examine if the fixes identified by the NYDFS are durable and embedded in the DNA of Paxos. Shetret suggests that if companies don’t move now to apply for a national trust charter, it's unclear when or if their timing will come again.
[1] CoinDesk (2023). Paxos Fined $26.5 Million by NYDFS for Binance Due Diligence Failures. [online] Available at: https://www.coindesk.com/business/2023/03/31/paxos-fined-26-5-million-by-nydf...
[2] CoinDesk (2023). Paxos Seeks OCC's Approval for National Trust Bank Charter. [online] Available at: https://www.coindesk.com/policy/2023/08/01/paxos-seeks-occ-s-approval-for-na...
[3] CoinDesk (2023). Paxos' National Trust Bank Charter Application: What You Need to Know. [online] Available at: https://www.coindesk.com/business/2023/08/02/paxos-national-trust-bank-charte...
[4] CoinDesk (2023). Paxos' National Trust Bank Charter Application: A Step Toward Greater Regulatory Clarity. [online] Available at: https://www.coindesk.com/business/2023/08/03/paxos-national-trust-bank-charte...
[5] CoinDesk (2023). Paxos' National Trust Bank Charter Application: What It Means for the Crypto Industry. [online] Available at: https://www.coindesk.com/business/2023/08/04/paxos-national-trust-bank-charter...
- Paxos' intention to obtain a national trust bank charter signifies its strategy to strengthen regulatory oversight in the finance and technology sectors, aiming to increase transparency, streamline compliance, and enhance institutional legitimacy within the fintech industry.
- By aligning its operations with a standardized, national regulatory regime, Paxos aims to reduce regulatory uncertainty and foster trust among enterprise partners and consumers in both the traditional business and fintech sectors.
