The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
The OCC conditionally approved the ICBA-opposed trust bank charter application from Paxos, a cryptocurrency platform.
Charter: Paxos applied to charter Paxos National Trust. The trust bank would offer custody, fiduciary, and “know your customer” services; custody and management of stablecoin reserves; and “other cryptocurrency services.”
ICBA Position: In a joint letter earlier this year, ICBA and other groups said more information is needed about the applications from Paxos and BitPay. The groups cited vague language in the applications, said they don’t appear to meet trust bank fiduciary requirements, and urged the OCC to postpone the application process and provide more information.