Key Insights
- PayPal applies for a Utah bank charter to control lending, deposits, and payments.
- Regulators review rising applications for bank charters from crypto-focused firms.
- PayPal has also expanded PYUSD across multiple blockchains.
PayPal has applied to establish a Utah-chartered industrial bank. This move would give the payments company more direct control over lending, deposits, and payment rails for U.S. small businesses.
The application, filed with Utah regulators and the Federal Deposit Insurance Corporation, reflects a broader effort to place its financial and digital-asset activities within a regulated banking structure.
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PayPal Targets Small Business Lending Through Bank Charter
In a press release, PayPal stated that the proposed bank would support small businesses that continue to face challenges in accessing capital. Moreover, Chief Executive Alex Chriss stated that establishing PayPal Bank would enhance efficiency and enable the company to better support small business growth and economic activity across the United States.
The filing also confirmed that Mara McNeill, a veteran of commercial banking with more than two decades of experience, has been selected to serve as president of the proposed bank.
A state-chartered industrial bank license would enable PayPal to integrate lending, deposit-taking, and payments more closely under a single structure. For PYUSD, the license would enable closer integration between the issuance of stablecoins and the traditional banking functions of deposit custody and settlement access.
Crypto Firms Increase Push for Banking Charters
PayPal’s move comes as U.S. regulators see a rise in banking charter applications from digital-asset firms. The head of the Office of the Comptroller of the Currency, Jonathan Gould, recently stated that the agency has received about 14 charter applications since the start of the year, including from companies operating in the sector.
Additionally, the OCC has already received applications from companies such as Circle, Coinbase, and Ripple to be included in the trust charter. Ripple has announced plans to have its dollar-pegged stablecoin, RLUSD, supervised by the federal government with a national banking license.
Stablecoins Gain Role in Merchant and Creator Pay-outs
Over recent years, PayPal has steadily integrated cryptocurrencies and stablecoins into its payments infrastructure, rather than treating them as separate offerings. Later in July, the company enabled merchants to accept Bitcoin and Ethereum on checkout, and the payments are immediately converted to allow sellers to get fiat.
PayPal has also expanded PYUSD across multiple blockchains, including Tron and Avalanche, to widen its on-chain use for settlement. Last week, the firm confirmed that U.S.-based YouTube creators can opt to receive payouts in PYUSD, expanding the use of stablecoins into everyday payment flows.
