Paxos’s bid for a national banking charter was cut short last week, after the original application had been filed on December 2020. This disappointment does not affect the blockchain tech company's existing business in the state of New York, and the possibility of filing another OCC application is present. Paxos hasn’t decided on its next steps yet, however.

The bid, if approved, would have given Paxos the power to custody both dollars and crypto, offer its stablecoin services across the country, and operate an exchange on a national level. The Office of the Comptroller of the Currency granted “preliminary conditional approval” and gave the company 18 months to execute the business plan.

The current situation with the national banking charter is surrounded with uncertainty, since recent rumors and investigations by the Securities and Exchange Commission and the New York Department of Financial Services are on the rise. The SEC sent Paxos a letter in February inquiring about its joint stablecoin project with Binance, BUSD, while NYDFS ordered them to stop issuing BUSD. Paxos claims to have ceased minting the token, but still awaits a response from the OCC.

Altogether, Paxos ambition for a national banking charter went awry. Their existing business in New York is safe, yet the possibility of filing a new application for the OCC exists, and the company needs to decide on its next steps soon. While being confronted with investigations and works with US regulators, the waiting carries on.



Other News from Today