Paxos Trust Company, known for issuing stablecoins like PayPal’s PYUSD and Pax Dollar (USDP). Paxos has reapplied for a national trust bank charter in August 2025, aiming to convert its existing New York Department of Financial Services (NYDFS) limited-purpose trust charter into a federal one under OCC oversight.
Paxos Trust Company issues several USD-backed stablecoins, each designed for specific use cases, with a focus on regulatory compliance and transparency. A U.S. dollar-backed stablecoin issued by Paxos Trust Company, regulated by the New York State Department of Financial Services (NYDFS).
It’s fully backed by cash and cash equivalents, redeemable 1:1 for USD, and available on multiple blockchains for near-instant global settlements and low-cost transactions. USDP is used for payments, trading, and integration with exchanges, wallets, and dApps.
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Paxos first applied for this charter in December 2020 and received preliminary conditional approval in April 2021. However, the application expired on March 31, 2023, as Paxos failed to meet the OCC’s 18-month deadline to establish the bank. The national trust bank charter would allow Paxos to:
Manage and hold customer assets nationwide. Settle payments faster under federal oversight. Enhance credibility with institutional clients due to stricter federal regulations. Operate uniformly across all U.S. states, moving beyond state-specific NYDFS regulation.
The application follows the passage of the GENIUS Act, signed into law by President Trump in 2025, which establishes the first federal framework for stablecoin issuers. This law requires stablecoins to be backed 1:1 by reserves (e.g., U.S. dollars, Treasuries) and mandates monthly public reports on these reserves.
A national trust bank charter does not permit Paxos to accept cash deposits or issue loans, unlike traditional banks. Instead, it focuses on custody services and asset management, aligning with Paxos’ blockchain and stablecoin infrastructure. Paxos joins other crypto firms like Circle (issuer of USDC) and Ripple (behind XRP and Ripple USD) in seeking national trust bank charters.
Currently, Anchorage Digital is the only U.S.-based digital asset company with an active national trust bank charter. Paxos has operated under NYDFS supervision since 2015, becoming the first blockchain firm to obtain a limited-purpose trust charter. It launched the first regulated stablecoin (Paxos Standard, PAX) in 2018. However, Paxos faced regulatory challenges, including:
A 2023 NYDFS order to stop issuing Binance USD due to compliance issues. A $48.5 million settlement with NYDFS in August 2025 for anti-money laundering deficiencies during its Binance partnership ($26.5 million fine, $22 million for compliance upgrades). OCC supervision ensures higher transparency, periodic audits, and stringent capital requirements.
Federal status strengthens Paxos’ credibility with international regulators (e.g., FIN-FSA in Estonia, MAS in Singapore, FSRA in Abu Dhabi), facilitating cross-border cooperation. Paxos maintains reserves at 102% of issued stablecoin value, ensuring 1:1 redemption and investor protection, which will be further reinforced under OCC rules.
The charter aligns with the growing stablecoin market (valued at $170 billion, projected to reach $3 trillion by 2030) and enhances Paxos’ ability to offer regulated blockchain solutions. The OCC will thoroughly review Paxos’ financial health, management, and compliance systems, especially given its recent $48.5 million settlement.
The Independent Community Bankers of America has raised concerns about granting bank-like privileges to crypto firms without adequate safeguards. The expiration of Paxos’ 2021 conditional approval and regulatory issues with Binance may complicate the current application process.
Paxos’ application is under review by the OCC. Paxos anticipates a smooth transition for customers, with uninterrupted services and assets fully backed by reserves.