Paxos has reapplied for a US national trust bank charter after its prior conditional approval expired in 2023. The company, which operates PayPal's PYUSD stablecoin, aims to convert its New York limited-purpose trust charter into a federal charter, which would enhance its appeal to institutional clients by allowing it to custody customer assets and settle payments under federal oversight. Despite receiving preliminary approval in 2021, Paxos’s charter expired due to regulatory pressures, including compliance issues with the New York Department of Financial Services that resulted in heightened scrutiny and a $26.5 million fine. Paxos has continued to operate under its existing New York charter while preparing for this renewed application amidst the establishment of the federal framework for stablecoin issuers with the recent GENIUS Act.

Source 🔗