Paxos has initial approval to establish its own “de novo” or new national trust bank after being approved by the Office of the Comptroller of the Currency (OCC), according to a company blog post. Paxos will be the first cryptocurrency-native company to attain that status.
Other digital asset companies have received the green light to convert to a national bank, but Paxos will be the first to keep its old regulatory structure, with the company retaining its New York Department of Financial Services state trust charter while also looking to apply for a federal charter, the post stated.
Paxos, while initially applying for the charter, said having OCC approval to be a trust bank would aid it in helping more customers across the country with more efficiency, according to the post.
The company said in the post that it sees “significant benefits in having both a nationally and state regulated bank.”
“Our clients and potential partners are some of the most sophisticated financial and tech institutions in the world,” the post stated. “They are accustomed to working with the best of the best. With separate oversight and jurisdiction on both levels, Paxos implicitly demonstrates just how our operations meet higher standards than others in our field. Importantly, Paxos will provide its clients with product choices and clear solutions that fit their individual needs.”
As to what happens after this, Paxos plans to undergo the creation of its trust bank. The company’s goal is to “enable the movement of any asset, any time, in a trustworthy way,” according to the post.
He said instead of putting in place a system installing newer tech to replace the 1970s Cobol systems that are still in place, a new system with token-based tech would be preferable for speed and a clear chain of title.
Selected by EFXA