The digital currency and stablecoin issuer Paxos has been granted conditional approval for a bank charter under the Paxos National Trust in New York. The U.S. Office of the Comptroller of the Currency issued a preliminary conditional approval which means the regulating entity still has to authorize the firmâ€™s future banking plans.
Paxos Granted Preliminary Conditional Approval for a US Bank Charter
The New York-based financial institution and technology company Paxos has been granted preliminary conditional approval for a bank charter by the Office of the Comptroller of the Currency (OCC). The OCC published information on the conditional approval on April 23, 2021, showing authorization of the companyâ€™s application to charter the Paxos National Trust.
â€œThe OCC granted a national trust bank charter to Paxos after [a] thorough review of the company and its current operations,â€ the OCCâ€™s press release notes. â€œIn granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications. The OCC granted preliminary conditional approval to Paxos after [a] thorough review of its application.â€
Paxos was founded in 2012 in New York City, but the company also has offices in Singapore and London as well. At the end of December 2020, documents show that Paxos has raised roughly $240 million in financing since the companyâ€™s inception. Paxos is also known for issuing a stablecoin based on the value of the U.S. dollar and a token backed by the precious metal gold as well. The preliminary approval status aims to provide Paxos the authority to exercise fiduciary powers under 12 USC 92a and 12 CFR 5.26.
Paxos National Trust Must Obtain the Regulatorâ€™s Final Approval
Paxos General Counsel Dan Burstein is addressed in the OCCâ€™s preliminary approval letter. The OCCâ€™s letter stresses that the regulating entity plans to process background checks and other reviews of the Paxosâ€™ executive staff.
â€œAccordingly, the continued service of these individuals will be dependent on satisfactory completion of the background investigation process,â€ the OCC letter states.
â€œPrior to the Bankâ€™s opening,â€ the OCCâ€™s approval letter concludes. â€œThe bank must obtain the OCCâ€™s prior written determination of no objection for any additional organizers or executive officers or directors appointed or elected before the person assumes the position.â€ Further, if the OCC finds any issues it can modify, suspend, and rescind the preliminary conditions if any material information changes before the OCCâ€™s final decision.
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