Payments company PayPal (PYPL) has applied for an industrial bank license in Utah, it said Monday, with the goal of creating a lending arm called PayPal Bank.
The company, which also operates the PYUSD stablecoin through a partnership with Paxos, said in a press release that it intends to “provide commercial lending solutions” to small businesses and interest-bearing savings accounts to other customers. It also aims to work with credit card networks.
PayPal also applied for deposit insurance through the Federal Deposit Insurance Corporation.
In a statement, PayPal CEO and President Alex Chriss said that “raising capital remains a major obstacle for small businesses striving to grow and scale.”
“Establishing PayPal Bank will strengthen our business and improve our efficiency, allowing us to better support small business growth and economic opportunity across the United States,” he said.
Utah industrial banks are subject to “the same regulatory and supervisory oversight as commercial banks,” but their activities are “not as restricted,” according to the Utah Department of Financial Institutions website, and these types of institutions are not subject to the Banking Corporation Act, which regulates federal banks and prevents monopolization.
While PayPal’s statement on Monday did not address its crypto-specific activities, PayPal has recently increased its foray into cryptocurrencies, adding wallet-to-wallet crypto transfer functionality earlier this year and allowing its users to create custom links to send or request funds via cryptocurrencies.
It also launched a Pay with Crypto feature for merchant services, which acts as an intermediary to allow merchants to accept cryptocurrencies as payment.
Monday’s request comes on the heels of the U.S. Office of the Comptroller of the Currency, a federal banking regulator, granting initial trust charters to five different crypto companies, including stablecoin issuers Circle and Paxos, Ripple, BitGo and Fidelity Digital Assets.
