PayPal has filed applications with Utah regulators and the Federal Deposit Insurance Corporation (FDIC) to establish a Utah-chartered industrial bank. The move, announced on Monday, aims to allow the payments giant to originate loans, hold customer deposits, and access payment networks directly, reducing its reliance on partner banks.
The company stated the primary goal is to "provide business lending solutions more efficiently to small businesses in the U.S., while reducing reliance on third parties." CEO Alex Chriss emphasized that "securing capital remains a significant hurdle for small businesses striving to grow and scale."
Critically, the approval of this banking charter is positioned to support PayPal's expanding cryptocurrency and stablecoin operations within a regulated framework. PayPal's crypto strategy has focused on integrating digital assets into regulated payment flows, starting with consumer trading and expanding to merchant acceptance and settlement.
In late July, PayPal enabled merchants to accept cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) at checkout, with transactions converted to fiat at the point of sale. The company has also broadened the footprint of its PayPal USD (PYUSD) stablecoin by deploying it on networks including Tron and Avalanche to increase availability for on-chain settlement.
Earlier this month, PayPal extended PYUSD's use to U.S. YouTube creators for receiving earnings, integrating the stablecoin directly into existing payment flows. The new banking entity would provide a more direct and controlled infrastructure to bolster these crypto and stablecoin settlement operations.
