Paxos Trust Company, the company behind PayPal’s PYUSD stablecoin, has filed to convert its New York limited-purpose trust charter into a US national trust bank charter, aiming to boost appeal to institutional clients. The federal charter would allow Paxos to custody customer assets and settle payments nationwide under federal oversight.

Paxos’ 2021 federal charter approval expired before launch, as conditional approvals expire if the bank is not opened within 18 months. Paxos continued operating under its New York limited-purpose trust charter since 2015 and expressed commitment to federal oversight when conditions were right.

Regulatory setbacks and penalties linked to Binance pressured Paxos, resulting in a $48.5 million settlement with the NYDFS over alleged anti-money laundering failures in its partnership with Binance. Paxos will pay a $26.5 million fine and allocate $22 million toward upgrading its compliance program. The company’s renewed bid for a national trust bank charter follows the establishment of the first federal stablecoin framework by the GENIUS Act. Other stablecoin issuers like Ripple and Circle have also applied for national trust bank licenses.

Read more at Cointelegraph: Paxos seeks US national trust bank charter after 2023 application lapse