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PayPal Cryptocurrency Partner Paxos Seeks To Become US-Regulated Bank

December 10, 2020 1:55 am
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PayPal Cryptocurrency Partner Paxos Seeks To Become US-Regulated Bank

Paxos, the cryptocurrency partner of PayPal Holdings Ltd (NASDAQ:PYPL), has filed an application with the Office of The Comptroller of the Currency (OCC) in order to obtain a charter to form a national bank. 

What Happened: The Paxos National Trust would operate out of New York, according to an application first noticed by CoinDesk.

Paxos’ general counsel and chief compliance officer Dan Burstein wrote in a blog post on Wednesday that, if the New York-based company is granted the charter, it would become the “first custodian of digital assets to be regulated at both the state and federal levels.”

“A national Trust Bank charter provides us with [the]  flexibility to operate across the US while continuing to adhere to the highest regulatory standards,” Burstein said.

The general counsel added it was beneficial for Paxos to hold trust charters from the state regulator — New York State Department of Financial Services — and the OCC, which regulates at a federal level.

Why It Matters: The Paxos application would be subject to a 30-day comment period and there is no surety that it would be sanctioned, noted CoinDesk.

Acting Comptroller Brain Brooks has reportedly said publicly that he would like cryptocurrency companies to secure federal charters.

Kraken and Avanti earlier secured state charters from the Wyoming Division of Banking.

Paypal and Paxos partnered this summer to provide services to the users of the latter to buy or sell virtual assets like Bitcoin.

The Peter Thiel-co-founded payments processor started offering Bitcoin (BTC), Ethereum (ETC), and other cryptocurrencies in late October.

Last month, it was reported that Paxos saw a 500% surge in trading volume in a month as trading volumes rose to $26.57 million.

Price Action: PayPal shares closed nearly 2.8% lower at $210.80 on Wednesday. Bitcoin traded 0.99% higher at $18,355.05 at press time.

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