Paxos has become the third federally regulated cryptocurrency bank in the United States, after receiving conditional approval for a bank charter from the Office of the Comptroller of the Currency (OCC).
Paxos gains OCC approval
Undoubtedly, cryptocurrencies are slowly going mainstream, and companies in the sector are gaining recognition from regulators in the United States and other parts of the world. Blockchain platform Paxos received a provisional trust charter from the OCC yesterday. This makes it the third federally regulated cryptocurrency bank.
The federal regulator announced yesterday it had granted the stablecoin issuer the approval to be a cryptocurrency bank. The regulator said, “The Office of the Comptroller of the Currency (OCC) today announced preliminary conditional approval of the application to charter Paxos National Trust, New York. The OCC granted a national trust bank charter to Paxos after a thorough review of the company and its current operations. In granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications.”
The endorsement means Paxos can now present its new Paxos National Trust entity online as a federally regulated entity. Inevitably, the firm will be able to offer custody services, stablecoin management, payment, exchange and other services to its clients.
Following the decision, Paxos is now the third federally regulated cryptocurrency bank in the US. It joins Protego and Anchorage on the list. In addition, Avanti and Kraken are also recognized as state-regulated crypto bank entities after receiving Special Purpose Depository Institution charters in Wyoming.
That being the case, Paxos intends to operate two trusts before the end of the year. The first one will be under a national bank charter. The second one will be under a New York Bitlicense.
Regulators are becoming comfortable with crypto companies
This latest development is another indicator that regulators are starting to accept cryptocurrency companies. In fact, this preliminary approval shows the OCC is comfortable with Paxos serving as a custodian for digital currency.
Paxos General Counsel Dan Burstein said, “This is a preliminary conditional approval, which means that the OCC is approving our business plan. It’s deeming the activities that we have identified in the business plan to be those that can be carried out by a national trust, that we have the right team in place and the right controls and plan in place to control our risk and to operate as a national trust company.”
Granted, by becoming an OCC-regulated trust, Paxos can now provide services across the United States. Besides this, they can do so without seeking state-level licenses in individual states.