PayPal moves to become a bank as it expands crypto and lending play Payments giant PayPal (PYPL) said Monday it has applied for an industrial bank charter in Utah as part of a plan to create a lending arm branded PayPal Bank. The company — which runs the PYUSD stablecoin in partnership with Paxos — said the new bank would offer business lending solutions aimed at small companies, interest-bearing savings accounts for customers, and partnerships with credit card networks. PayPal also applied for deposit insurance from the Federal Deposit Insurance Corporation (FDIC). “Securing capital remains a significant hurdle for small businesses striving to grow and scale,” PayPal CEO and President Alex Chriss said in the company statement. “Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the U.S.” Why Utah? Industrial banks in Utah are governed by the state’s Department of Financial Institutions and face “the same regulatory and supervisory oversight as commercial banks,” but they operate with more flexibility than typical banks in some areas. Notably, these institutions are not subject to the Bank Holding Company Act, a federal framework that places extra restrictions on bank owners and can limit certain activities. Crypto context: PayPal didn’t explicitly link the application to its crypto operations in Monday’s announcement, but the company has been steadily expanding in the space. This year PayPal added wallet-to-wallet crypto transfers, enabled users to create personalized crypto payment links, and rolled out a “Pay with Crypto” merchant feature that allows merchants to accept cryptocurrencies through PayPal as an intermediary. PayPal also continues to operate the PYUSD stablecoin in collaboration with Paxos. Regulatory backdrop: PayPal’s move comes as U.S. regulators have shown increased openness to crypto firms seeking bank-like charters. The Office of the Comptroller of the Currency recently granted initial trust charters to five crypto firms — including stablecoin issuers Circle and Paxos, plus Ripple, BitGo and Fidelity Digital Assets — signaling a shifting regulatory landscape for crypto-native financial services. What it could mean: A PayPal-controlled bank could give the company more control over deposits, lending products, and onboarding of small-business customers — and potentially offer tighter integration with its payments and crypto products. How regulators respond and whether PayPal links the charter explicitly to its crypto and stablecoin operations will be items to watch as the application progresses. Read more AI-generated news on: undefined/news

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