Paxos seeks a U.S. bank license, joining Ripple and Circle in aiming for federal oversight to boost trust and crypto compliance.
Paxos, a major stablecoin company, has officially applied for a national trust bank charter. This move makes Paxos the third crypto firm in recent months to seek federal approval, following similar steps by Ripple and Circle. It aims to transform its existing state license with the New York Department of Financial Services into a national one.
Paxos Moves Toward National Crypto Regulation
In case of approval, the Office of the Comptroller of the Currency (OCC) would regulate Paxos. Such a change would enable Paxos to have a single set of rules in the United States. It further depicts an emerging trend in the crypto sector that involves collaborating more with the federal authorities.
Paxos is most famous for having released two stablecoins by the names PayPal USD (PYUSD) and Pax Dollar (USDP). The digital coins are created to maintain a stable value, which is normally pegged to the U.S. dollar. Lots of individuals employ them to make payments, trade, and transfer funds. With the increase in popularity of stablecoins, regulators are giving them increased attention.
On Monday, Paxos CEO and co-founder Charles Cascarilla announced the news in a press release. According to him, the application of the national charter falls under the ambition of Paxos to construct the safest and most reliable crypto infrastructure. He addressed the strength of blockchain technology as well. Cascarilla believes that blockchain can be used to facilitate financial freedom, yet heavy regulations will be required to win trust in society.
Other firms, such as Ripple and Circle, are also pursuing the same direction. They are also seeking national licenses. There are numerous advantages of a federal charter. To begin with, it will enable the crypto companies to be governed by the same regulatory policies across all states. This makes it easier to be compliant. It can also be used to foster customer confidence, who would feel more secure in using businesses that are heavily supervised.
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Bank License Bid Marks Major Step for Paxos in Regulated Crypto Future
However, getting a national charter is not easy. The OCC is a high-standard body. Paxos should demonstrate the ability to deal with risks, comply with the law, and safeguard customers. Nonetheless, Paxos is ready, as far as it is concerned. Its existing New York license is already accompanied with tough provisions. McDonald’s in Mexico would take a national license built on that good foundation.
This may prove to be a massive turnaround for Paxos. It can make the company expand and become distinct in competition with its rivals. A federal license would be able to pull greater business in with banks, payment corporations, and heavy investors. It also has the potential to entice additional crypto businesses to adopt the same strategy.
Nevertheless, not all people are that supportive. There is a fear among some members of the crypto community that an increase in regulation would hamper innovation. They are afraid that rules would inhibit innovativeness and development. However, Paxos feels that it is the correct course of action to take federal oversight. They interpret it as a means of responsible and safe growth.
Finally, Paxos will be making an ambitious and significant move. The company aims at long-term prosperity and success, as demonstrated by its intent to pursue a national charter, which demonstrates the company as a safety and trust enthusiast. Paxos wishes to pioneer as the crypto world evolves. Industry participants will now keep their tabs on whether the OCC will accept the request.
The post Paxos Applies for Federal Bank License, Following Ripple and Circle appeared first on Live Bitcoin News.
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