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- Stablecoin strategy deepens as PayPal applies for a Utah industrial bank license.
- Proposed PayPal Bank targets small business lending and deposit services.
- PYUSD expands into creator payouts as regulatory pressure eases.
PayPal has formally applied for a Utah state-chartered industrial bank license with state regulators and the Federal Deposit Insurance Corporation. The filing was submitted on Monday. The move places the payments company among fintech and crypto firms seeking bank charters. It also marks a structural step to support PayPal’s regulated stablecoin operations in the United States.
The application would enable PayPal to form an industrial loan company called PayPal Bank. The proposed unit would concentrate on providing business loans to small businesses in the US. PayPal said it is difficult for many small firms to get access to growth capital. The company is planning to fill the gap through direct lending services.
A Utah state-chartered license would give PayPal expanded banking authority. It would enable the business to originate loans and accept deposits from customers. It would also enable access to payment networks on a direct basis. With these capabilities, the bank’s dependence on partner banks would decrease. They would also sustain operational efficiency for the PYUSD stablecoin.
Crypto Charter Applications Rise as PayPal Seeks Banking Approval
PayPal Chief Executive Officer Alex Chriss said small businesses face significant hurdles when seeking financing. He stated that establishing PayPal Bank would strengthen PayPal’s business and improve efficiency. Chriss said the structure would allow PayPal to better support small business growth and economic opportunity across the US.
The bank charter effort comes amid rising interest from crypto firms in regulated banking access. Jonathan Gould, head of the US Office of the Comptroller of the Currency, recently said the agency has received about 14 charter applications since the start of the year. Some of those applications came from digital asset firms.
Also Read: Crypto Promoter Rodney “Bitcoin Rodney” Burton Faces $1.8 Billion Fraud Charges
The OCC is already considering trust charter applications from several crypto companies. These include stablecoin issuer Circle, exchange operator Coinbase, and blockchain firm Ripple. Regulators are examining how these companies are planning to operate under federal oversight.
Ripple and PayPal Advance Regulated Stablecoin Strategies
Ripple has said that it plans to enact federal supervision on its dollar-backed stablecoin, RLUSD. The company has sought a national banking license to support that goal. The move reflects increasing regulatory engagement among stablecoin issuers.
PayPal has been expanding its regulated digital asset activities recently. The company enables merchants to accept Bitcoin and Ethereum upon checkout. It launched the PYUSD stablecoin in August of 2023. The token has been issued in collaboration with Paxos Trust Company, a regulated US entity.
Earlier this year, the US Securities and Exchange Commission completed its investigation into PYUSD. The agency did not take any further steps on stablecoin. The decision had closed one of the most visible regulatory reviews involving PayPal.
PayPal has appointed Mara McNeill as the president of PayPal Bank. Her banking and commercial lending experience is more than 20 years Her role will include overseeing the operations of the proposed bank.
Last week, PayPal announced that US-based YouTube creators can receive payouts in PYUSD. The update extends stablecoin usage to creator payments.
Also Read: SGB Launches On-Chain Stablecoin Service to Streamline Cross-Border Business
