Paxos’s Application For A New Bank Charter Expired On March 31

Key Points:

• Paxos’ first application for a new bank charter, submitted in December 2020, expired on March 31.
• The company was given 18 months to carry out the business plan by the OCC.
• The now-expired application has no bearing on the stablecoin issuer’s current operations.

The records of the U.S. Office of the Comptroller of the Currency (OCC) show that the national banking license application submitted by stablecoin issuer Paxos in December 2020 expired at the end of March.

A spokesman said to The Block that the expiry of the application did not affect Paxos’ existing business. The company will determine the next steps in the near future, which may include reapplying for OCC supervision.

The news comes almost two years after the OCC approved the company’s application to establish Paxos National Trust, New York, with preliminary conditional approval. The permission permitted Paxos to divide its activities into two businesses, one of which is regulated on a national level and the other of which retains its present regulatory framework.

The stablecoin issuer’s banking aspirations have come under scrutiny in recent months. In February, Paxos faced allegations that the OCC had urged it to abandon its application for a national trust bank license.

Paxos was given 18 months to carry out the business plan by the OCC. The approval meant that the company would be authorized to hold both money and cryptocurrency, provide stablecoin services throughout the country, and operate a nationwide exchange.

State and federal officials are also taking action against the corporation. The Securities and Exchange Commission (SEC) informed the stablecoin issuer in February that the agency was examining its joint stablecoin project with Binance, BUSD.

Paxos was also instructed by the New York Department of Financial Services to cease issuing BUSD, and the company later announced that it had stopped minting the token.

Paxos redeemed more than $7.9 billion in BUSD in 32 days, displaying its robust risk management approach and dedication to client asset preservation. The capacity to redeem over half of the BUSD in circulation in only 32 days demonstrates its commitment to customers and risk management strength.

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Harold

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