Payoneer has applied for a national trust bank charter with the Office of the Comptroller of the Currency, the cross-border payments platform said Tuesday.
Approval would allow PAYO Digital Bank, as the entity would be called, to issue, send and receive stablecoins under direct federal oversight, offer custody services, manage stablecoin reserves and let customers convert funds from digital assets to fiat currencies.
The charter would not, however, let New York City-based Payoneer take deposits or lend.
In Tuesday’s release, Payoneer called the application a “critical next step” in the company’s “strategy to integrate stablecoin capabilities into its global payments ecosystem.” The company counts roughly 2 million users, it said – mostly small and medium-size businesses.
“Through PAYO Digital Bank, we aim to provide customers with a trusted and regulated way to leverage the latest payment innovations as part of their global financial operations,” Payoneer CEO John Caplan said Tuesday in a statement.
The application comes amid a swell of interest in OCC charters. Eighteen firms applied for charters last year, and many sought the national trust bank charter that Payoneer wants.
“What we see now is the fintech sector … finally being encouraged and welcomed into the regulatory fold, seeking the benefits of having a banking license and also being willing to meet the very high standards that go along with that privilege,” Klaros Group co-founder Michele Alt told Banking Dive last month.
The OCC in December gave conditional approval for national trust bank charters to crypto firms Circle Internet Group, Ripple, Paxos Trust, BitGo and Fidelity Digital Assets. Most recently, Crypto.com received the OCC’s conditional green light. Also this month, the agency gave Stripe subsidiary Bridge conditional approval – roughly four months after it applied for a national trust bank charter.
Incidentally, Bridge and Payoneer last week announced they would partner on a suite of embedded stablecoin capabilities.
In Tuesday’s release, Rob Morgan, the proposed CEO of PAYO Digital Bank, said a charter would put Payoneer’s users at the “epicenter of global adoption, where stablecoins can deliver meaningful improvements to how global trade happens.”
“PAYO Digital Bank will help us offer global SMBs an integrated, business-grade stablecoin solution that will accelerate payments, add transparency, and improve access to markets,” Morgan said.
Among firms that, like Payoneer, are waiting for the OCC’s conditional nod are Trump family-led World Liberty Financial and Nomura spinoff Laser Digital.
At least one advocacy group signaled its disapproval of the uptick in charter activity. The Bank Policy Institute in October accused digital asset firms applying for the trust charter of “not planning to operate genuine trust companies.”
“Endorsing this pathway and allowing firms to choose a lighter regulatory touch while offering bank-like products could blur the statutory boundary of what it means to be a ‘bank,’ heighten systemic risk and undermine the credibility of the national banking charter itself,” BPI warned the OCC.
Paige Pidano Paridon, BPI’s co-head of regulatory affairs, said digital asset firms should seek full-service national banking charters rather than limited-purpose trust licenses if they want to engage in traditional banking activities.
Fintechs such as Mercury and Bunq applied for full-service charters in December and January, respectively. Brazilian challenger Nubank last month received conditional OCC approval for the full-service charter.
Erebor Bank, which applied last June for a full-service national banking charter, spent about four months in the “conditional approval” phase before getting a final green light this month.
