The Office of the Comptroller of the United States (OCC) today awarded the stablecoin company and PayPal Paxos employee a federal charter to create a national credit bank – only the third such charter that the OCC awards cryptocurrency companies.
Paxos joins the warehouse company Achorage, which secured its first charter in January, and housing manager Protego, which was awarded a conditional lease agreement in February.
As with the previous planners, the designation “bank” is somewhat misleading, as Paxos does not process deposits immediately. Instead, they obtained a “fintech charter,” a type of bank charter that was pioneered by former Acting Inspector Brian Brooks.
The charter authorizes Paxos to carry out activities such as “digital asset preservation services; storage and management of stable reserves of US dollar currencies; payment, exchange and other agency services; other cryptocurrency services such as trading services and enabling partners to buy and sell cryptocurrencies; and“ Know Your Customer ”as a service. According to the OCC approval letter sent to Paxus General Counsel Dan Burstein.
The letter indicates that all of these activities are currently performed by the Paxos Trust, which works with New York BitLicense; The statute allows the new Paxos unit to become a federally regulated unit.
The OCC letter also indicates that there has been some opposition to the charter from the traditional banking sector.
During the public comments section, the OCC received a “letter signed by a number of commercial groups representing banks” arguing that “the proposed activity does not conform to the OCC’s precedent of trust activities conducted by national trust banks” and that “the request does not provide sufficient information on the bank’s business model.” .
However, the OCC objected that it “received enough information to make an informed decision,” and ultimately decided that it was “appropriate to give prior approval to allow regulators to continue to regulate the bank”.
This approval comes after a series of notable victories for Paxos. The company raised $ 142 million in a funding round in December and applied for a clearing license in April to try out a same-day stable currency settlement with Credit Suisse, among others.