The payments firm PayPal (PYPL) has submitted an application for a Utah industrial bank license, aiming to establish a lending division named PayPal Bank.
The company, known for its PYUSD stablecoin launched in partnership with Paxos, announced in a press release its plans to “offer lending solutions for businesses” and interest-bearing savings accounts for its customers. It also plans to collaborate with credit card networks.
Additionally, PayPal has sought deposit insurance from the Federal Deposit Insurance Corporation.
In a statement, PayPal’s CEO and President Alex Chriss remarked, “access to capital continues to be a major challenge for small businesses trying to expand and grow.”
“The creation of PayPal Bank will enhance our business operations and improve efficiency, allowing us to better foster the growth of small businesses and economic prospects throughout the U.S.,” he added.
Utah industrial banks are regulated with “the same oversight as commercial banks,” but have “fewer operational restrictions,” as noted by the Utah Department of Financial Institutions website. These institutions are not subject to the Bank Holding Company Act, which governs federal banks to prevent monopolistic practices.
While the statement did not address PayPal’s specific activities in cryptocurrency, the company has recently expanded its engagement in that area, introducing wallet-to-wallet crypto transfer options earlier this year and enabling users to create custom links for sending or requesting crypto funds.
It has also introduced a Pay with Crypto feature for merchant services, acting as a facilitator that allows merchants to accept cryptocurrencies as payment.
This application comes shortly after the U.S. Office of the Comptroller of the Currency, a federal banking regulator, issued initial trust charters to five different crypto firms, including stablecoin issuers Circle and Paxos, along with Ripple, BitGo, and Fidelity Digital Assets.
