PayPal has applied for a Utah state-chartered industrial bank license, marking a decisive step in its stablecoin and regulated banking strategy in the United States.
The payments company filed the application with Utah regulators and the Federal Deposit Insurance Corporation on Monday. The move places PayPal alongside fintech and crypto firms that are pursuing bank charters to expand financial services under direct supervision.
PayPal plans to create an industrial loan company named PayPal Bank. The unit will focus on business lending for small businesses across the US market.
A state-chartered license allows PayPal to originate loans and hold customer deposits. PayPal also offers direct access to payment networks without relying on partner banks.
The structure supports PayPal’s role as the issuer of the PYUSD stablecoin. Direct banking access strengthens settlement efficiency and liquidity management for stablecoin operations.
Alex Chriss, the chief executive, highlighted the ongoing challenges small enterprises face in obtaining growth capital. He asserted that PayPal Bank will enhance efficiency and increase economic opportunity in the country.
The application represents a wider trend across crypto-linked companies in favor of regulated banking systems. According to federal agencies, charter applications linked to digital assets have continuously grown.
OCC reviews trust charter bids from crypto firms
Jonathan Gould, head of the Office of the Comptroller of the Currency, said that the office has received approximately 14 charter submissions since the beginning of the year. Some of those filings belong to companies that are involved in crypto markets.
The OCC is also reviewing five crypto companies for the application of trust charters. These are Circle, Coinbase, and Ripple.
Ripple has expressed the intention of putting its dollar-backed stablecoin, RLUSD, under federal regulation by applying to get a national banking license. The move is indicative of greater compliance pledges within the stablecoin industry.
PayPal continues to integrate the digital assets into its payments ecosystem. The company has already enabled US merchants to accept Bitcoin and Ethereum at the checkout.
The company focuses on regulation as a fundamental part of its crypto strategy. Executives present compliance as a requirement to adhere to in the long run.
PayPal has appointed Mara McNeill as the president of PayPal Bank. She has over 20 years of banking and commercial lending experience.
The appointment of new leadership indicates an emphasis on conventional credit and risk management. PayPal is set to incorporate financial discipline with digital innovation.
PYUSD stablecoin advances under US regulatory oversight
In August 2023, PayPal introduced a dollar-pegged stablecoin, PYUSD. The token is run in collaboration with the Paxos Trust Company, a company regulated in the US.
The US Securities and Exchange Commission closed its stablecoin investigation earlier this year. The agency did not initiate any further enforcement.
Last week, PayPal announced that US YouTube creators can be paid in PYUSD. The update extends the use of stablecoins to daily payments to creators.
The banking application makes PayPal more connected to the US financial ecosystem. With regulatory oversight, the relocation strengthens the stablecoin infrastructure.