Paxos has obtained “conditional approval” to set up a US bank
The stablecoin issuer has been granted a banking license, but that does not mean that they engage in banking activities in the traditional sense.
The US Office of Financial Supervision (OCC) has delivered a certificate authorizing the creation of a national bank to stabilization company Paxos – making Paxos the third cryptocurrency company authorized to create the bank.
Amin Achorage was the first to get the license in January, Protego followed a month later.
The naming of a “bank” can be a bit misleading, as Paxos can’t start the guard right away because they’ve secured a “fintech charter” – a kind of bank charter created by former OCC chief Brian Brooks.
The charter allows Paxus to participate in activities such as “digital asset preservation services; maintenance and management of stable US dollar reserves; payment, exchange and other services; other cryptocurrency services: trading, buying and selling, Know Your Customer service”.
The OCC has sent a letter of approval to Paxos Senior Adviser Dan Burstein.
The letter indicates that these activities are currently being performed by the Paxos Trust, which operates BitLicense in New York. The charter also allows the new Paxos unit to become a federally regulated organization.
The OCC letter also indicates that the traditional banking sector has spoken out against the issuance of the charter.
During the public comment period, the OCC received a “letter signed by a number of business groups representing banks”, arguing that “the proposed activities do not align with the OCC example of trust activities by national trust banks” and that “the application does not provide sufficient information on the bank’s business model. “.
However, the OCC believed that it “received enough information to make an informed decision” and ultimately decided that it was “appropriate to grant prior conditional approval so that the regulators can proceed with the start-up of the bank”.
It was Paxus’ third straight win in recent months.
In December, the company raised $ 142 million in a financing round, and in April it applied for a clearing clearance following the successful introduction of an overnight stablecoin clearing into Credit Suisse, among others.
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