PayPal Applies for Utah Industrial Bank License to Launch Lending Arm
PayPal has applied for a Utah industrial bank license to establish PayPal Bank, a new lending arm focused on providing business loans to small businesses and offering interest-bearing savings accounts. The bank aims to secure FDIC deposit insurance and plans to partner with credit card networks to support payments-related services.
Utah industrial banks are regulated by the Utah Department of Financial Institutions and are subject to fewer restrictions than banks regulated under the federal Bank Holding Company Act. This move aligns with PayPal's existing PYUSD stablecoin operations managed via Paxos, as well as its broader crypto features including wallet-to-wallet transfers and the Pay with Crypto option for merchants.
The recent granting of initial trust charters to five crypto firms—Circle, Paxos, Ripple, BitGo, and Fidelity Digital Assets—by the Office of the Comptroller of the Currency (OCC) highlights growing regulatory momentum in crypto banking. PayPal CEO Alex Chriss emphasized that securing capital remains a challenge for small businesses, and that the creation of PayPal Bank would help bolster growth and expand economic opportunities.
