Paxos National Trust Bank application expired, BUSD market cap continues to decline, still seeking investment manager

The largest stablecoin BUSD issued by Paxos, a stablecoin issuer, was banned from issuance by the New York State Department of Financial Services (NYDFS) in mid-February. Currently, its circulation has decreased from $16 billion in February to $7 billion. The national trust bank license that Paxos applied for from the Office of the Comptroller of the Currency (OCC) has also expired. However, Paxos posted a job advertisement on LinkedIn last week, seeking a new portfolio management director to oversee decisions on a portfolio reserve exceeding $20 billion.

Paxos Stablecoin BUSD Market Value Continues to Decline

Paxos' largest stablecoin BUSD has seen a continuous decrease in market value due to being prohibited from issuing by the New York Department of Financial Services (NYDFS) in mid-February. The reason behind this prohibition was the unauthorized issuance of Binance-Peg BUSD. Paxos failed to conduct regular risk assessments and due diligence updates for Binance and customers using BUSD. Following the incident, BUSD can only be redeemed and not issued anew, leading to a decrease in circulation from $16 billion in February to $7 billion.

On the other hand, its other stablecoin USDP has a market value of only $870 million.

Paxos National Trust Bank Application Has Expired

Paxos holds a New York State Trust License from the NYDFS, offering custody services for assets such as cash, gold, and cryptocurrencies. The Office of the Comptroller of the Currency (OCC) conditionally approved Paxos' application for a national trust bank, Paxos National Trust, in April 2021. However, Paxos still needs to demonstrate to the OCC that its business model can operate safely. There were rumors in the market that Paxos was asked to withdraw its national trust bank license application from the OCC.

Records from the Office of the Comptroller of the Currency show that the stablecoin issuer's initial application for a new bank charter, submitted in December 2020, expired on March 31. According to The Block's report, Paxos will determine its next steps soon, which may include reapplying for OCC oversight.

Paxos Seeks Portfolio Management Director

Paxos is seeking a Portfolio Management Director with over 15 years of experience in trading, structured finance, or portfolio management in traditional financial markets or related fields. Over three hundred candidates have applied for the position.