Payments company PayPal (PYPL) has applied for a Utah industrial bank license, it announced 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 business lending solutions” to small businesses and interest-bearing savings accounts to other customers. It also plans to work with credit card networks.
PayPal also applied for deposit insurance from the Federal Deposit Insurance Corporation.
In a statement, PayPal CEO and President Alex Chriss said that “obtaining capital remains a significant barrier for small businesses striving to grow and scale.”
“The creation of PayPal Bank will strengthen our business and improve our efficiency, allowing us to better support small business growth and economic opportunity in 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, as these types of institutions are not subject to the Bank Holding Company Act which regulates federal banks and prevents monopolization.
Although PayPal’s statement on Monday did not address its crypto-specific activities, PayPal has recently expanded its foray into the crypto space, adding wallet-to-wallet crypto transfer functionality earlier this year and allowing its users to create custom links to send or request funds via crypto.
It also launched a Pay with Crypto feature for merchant services, acting as an intermediary to allow merchants to accept cryptocurrencies as payment.
Monday’s request follows one from the U.S. Office of the Comptroller of the Currency, a federal banking regulator, which granted initial trust charters to five different crypto companies, including stablecoin issuers Circle and Paxos, Ripple, BitGo and Fidelity Digital Assets.
