Paxos Becomes Third Federally Regulated Crypto ‘Bank’ – CoinDesk – CoinDesk

Paxos Becomes Third Federally Regulated Crypto ‘Bank’ – CoinDesk – CoinDesk

Stablecoin issuer and blockchain startup Paxos has become the third crypto-native company to score a federal trust charter through the U.S. Office of the Comptroller of the Currency (OCC). 

The national bank regulator announced Friday it has granted Paxos a preliminary charter, letting the firm bring its new Paxos National Trust entity online as a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services.

With the approval, Paxos joins Anchorage and Protego in becoming one of the only national trusts that were born in the crypto ecosystem. Kraken and Avanti have also become state-regulated crypto bank entities after securing Special Purpose Depository Institution charters through Wyoming. 

The move is another sign that the global cryptocurrency ecosystem is becoming increasingly acceptable to regulators, who have traditionally been wary of the still-young industry. In particular, the preliminary approval indicates that the OCC is comfortable with Paxos as a custodian, which is significant for an industry prone to hacks or exchange crises.

Becoming an OCC-regulated trust is one way crypto exchanges can operate nationwide without needing to secure state-level licenses in each of the 49 different U.S. states (Montana doesn’t have a licensing requirement). 

“This is a preliminary conditional approval, which means that the OCC is approving our business plan,” said Paxos General