• Paxos denied rumors of a bank charter rejection from the Office of the Comptroller of the Currency (OCC).
• Paxos received OCC preliminary approval in April 2021 and is working constructively with the regulator.
• Rumors emerged on Feb. 9 suggesting that Paxos faces a probe from the New York Department of Financial Services (NYDFS).
Paxos Denies Bank Charter Rejection Rumors
Paxos, a stablecoin issuer, has refuted rumors that its application for a national bank charter from the Office of the Comptroller of the Currency (OCC) has been rejected. The company had received preliminary approval from OCC in April 2021 and was set to open its chartered bank within 18 months. However, after 22 months, rumors began circulating that OCC had denied Paxos‘ application for a bank charter.
Continuing Work With OCC
In response to these rumors, Paxos released an official statement on Twitter claiming that their application had not been rejected by OCC nor had they been asked to withdraw it. Instead, they are continuing work with the regulator constructively. If successful, Paxos will be able to operate as a federally-regulated digital asset bank alongside competitors Anchorage and Protego across all states without requiring individual licenses in each state.
Investigation By NYDFS?
On February 9th, additional speculation arose regarding an investigation into Paxos by New York’s Department of Financial Services (NYDFS). Both parties have yet to confirm or deny these allegations but if true, this would affect its operations as it is responsible for two stablecoins – Binance USD (BUSD) and Pax Dollar (USDP) – as well as offering crypto brokerage services and powering PayPal’s crypto trading capabilities.
Implications Of A Bank Charter
If granted a bank charter by OCC, it would enable them to offer banking services such as providing loans and deposits denominated in cryptocurrencies which could be used for payments outside of traditional banking infrastructure. This could help promote wider adoption of cryptocurrencies in mainstream finance due to greater trust among investors resulting from more stringent regulation than other cryptocurrency platforms currently operating without formal approval from financial regulators like SEC or CFTC.
Conclusion
At present time there seems to be no concrete evidence supporting either party’s claims though both entities remain tight lipped on any potential investigations or rejections; however it certainly appears that if given federal recognition through obtaining a national banking charter it would prove beneficial for both Paxos and cryptocurrency investors alike who are looking for greater legitimacy when making investments decisions within this space.