The company Paxos, a provider of cryptocurrency services and a partner of the PayPal payment platform, received authorization to operate with a banking license in the United States.
It is the first cryptocurrency company to obtain ‘de novo’ status. This means that Paxos, in addition to continuing to provide its current services, is enabled to launch a bank from scratch anywhere in the United States.
Paxos currently operates with a New York State BitLicence. With the new authorization, the corporation becomes dependent on the regulations of the federal government, without the need to request a special permit for each state.
According to the company’s legal counsel, Dan Burstein, this is “a preliminary conditional approval.” The specialist details: «it is considered that the activities that we have identified in the business plan are those that can be carried out by a national trust, that we have the appropriate equipment, the controls and the appropriate plan to control our risk and operate as a national trust company ‘.
Burstein clarified that the Paxos business will not change immediately due to the new license and that, for the time being, they will continue to operate under New York regulation. The final statute can take up to a year and a half, during which time Paxos must execute its business plan and, in practice, demonstrate to the Office of the Comptroller of the Currency (OCC) that it can operate safely.
Paxos joins the nearly 1,200 entities in the US federal banking system.
Among the services provided by Paxos are cryptocurrency brokerage, stock liquidation and the automation of markets for currencies and commodities. This company is also responsible for the stablecoins Paxos Standard and Binance USD, which maintain parity with the US dollar; and Pax Gold, the price of which is equal to one troy ounce of gold.
In relation to PayPal, as reported by CriptoNoticias, Paxos solutions have allowed the payment processor to easily integrate cryptocurrency purchase and sale services. They also facilitate the management of the technical and administrative aspects involved in incorporating digital assets.
According to information provided by the Office of the Comptroller of the Currency in the United States, the federal banking system includes nearly 1,200 banks, savings associations, and federal branches of foreign banking organizations operating in that country. The operations carried out by these entities include banking activity, trusts and issuance of credit cards, among others.
Other companies related to bitcoin and cryptocurrencies that have obtained banking licenses in the United States are the exchange Kraken and the financial group Avanti. Also, since mid-2020, the OCC enables established banking entities to provide services with cryptocurrencies.
The latter has already been used by some banks, for example, the Bank of New York Mellon. It is the oldest bank in the United States that, in February 2021, announced that it would incorporate the cryptocurrency custody service.