Stablecoin issuer Paxos has formally reapplied for a national trust bank charter with US regulators. This move seeks enhanced regulatory oversight and operational standards following prior regulatory challenges and the expiration of its earlier conditional approval.
Paxos previously secured conditional approval for a national charter but faced regulatory issues during the implementation phase. These culminated in a $48.5 million settlement with the New York Department of Financial Services (NYDFS) concerning compliance matters related to the Binance USD (BUSD) stablecoin. Its initial conditional approval subsequently expired without being finalized.
Despite this, the company continues its stablecoin and digital asset services regulated under an existing New York limited-purpose trust charter obtained in 2015.
The renewed application aims to significantly bolster the company’s regulatory compliance framework and strengthen its appeal to institutional clientele seeking secure digital asset infrastructure. Paxos intends to meet comprehensive requirements for capital reserves, operational resilience, and compliance protocols inherent in the national charter process.
Successfully obtaining the national trust charter would represent a major step in Paxos’s efforts to operate within a more stringent regulatory framework and position itself favorably within the evolving US digital asset landscape.