- Key insight: Payoneer has applied for a national trust bank charter to establish PAYO Digital Bank, N.A., allowing it to issue its own stablecoin, PAYO-USD.
- What’s at stake: Traditional banking groups warn that granting trust charters to digital asset firms creates “shadow banks” that avoid strict capital and community reinvestment requirements.
- Expert quote: Mickey Marshall of the ICBA warns that stablecoins will drain deposits from community banks, “severely reducing their ability to fund small business and mortgage loans.”
Overview bullets generated by AI with editorial review
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Global payments company Payoneer applied for a national trust bank charter on Tuesday, seeking to issue its own stablecoin as the Trump administration generously issues bank charters to digital assets firms.
Payoneer submitted the application to the Office of the Comptroller of the Currency to establish PAYO Digital Bank, N.A. If approved, the new entity will allow the company to issue a U.S. dollar-pegged cryptocurrency called PAYO-USD, manage the reserves backing the token, and provide digital asset custody services.
The move comes just one day after the OCC conditionally approved a similar trust charter for cryptocurrency exchange Crypto.com and merely two weeks after the agency granted a conditional charter to Bridge, a stablecoin infrastructure provider owned by Stripe and newly announced Payoneer product partner.
The rapid influx of non-traditional bank charters could alter the competitive landscape for U.S. commercial banks, and critics (including traditional banks of all sizes) are warning against the trend.
These newly chartered trust banks could function essentially as commercial banks by taking deposit-like funds via stablecoins, but without the strict capital, liquidity and community reinvestment requirements that full-service banks must follow, according to critics.
The Payoneer and Bridge partnership
Payoneer’s application closely follows a Feb. 17 announcement that the company partnered with Bridge to embed stablecoin receiving, holding, and sending capabilities directly into the Payoneer platform.
Days earlier, on Feb. 12, Bridge received its own conditional charter from the OCC, allowing the Stripe subsidiary to issue stablecoins and manage reserves under direct federal oversight.
While both companies seek to leverage stablecoins, their target applications differ, and Payoneer plans to maintain the relationship.
“As we move forward, we will continue to rely on partners like Bridge for our technology infrastructure and orchestration,” Rob Morgan, the proposed CEO of PAYO Digital Bank, told American Banker on Tuesday.
Payoneer facilitates cross-border business and payments. The company says it serves nearly two million customers, specifically focusing on helping small- and medium-sized businesses in emerging markets connect to the global economy.
Bridge, which Stripe acquired earlier this month, provides back-end technology that enables other businesses to receive, store, convert, issue and spend stablecoins.
“Bridge was built to abstract away the hardest parts of blockchain infrastructure so companies like Payoneer can focus on building great financial experiences,” according to Zach Abrams, co-founder and CEO of Bridge.
Payoneer intends to integrate its proposed trust bank exclusively into its existing cross-border payments ecosystem, offering on-ramp and off-ramp settlement services directly to its nearly two million small- and medium-sized business customers.
A wave of stablecoin charters
Recent charters granted by the Trump administration and Comptroller of the Currency Jonathan Gould represent an effort to welcome non-traditional financial firms into the federal banking system.
In December, the OCC conditionally approved five trust charters for digital asset firms, including Ripple, Paxos, and Fidelity Digital Assets.
To secure these approvals, the OCC required the banks to maintain a minimum amount of tier 1 capital—ranging from $6.05 million to $25 million—and hold 180 days of operating expenses in eligible liquid assets.
The OCC also forced the applicants to obtain written nonobjection from regulators before appointing senior executive officers and mandated that the firms conform all stablecoin activities to federal law.
The approvals are coming in fast. The OCC recently approved tech-focused Erebor Bank in just 125 days, compared to 406 days for a charter under the previous administration. The comptroller is often granting approvals in less than six months and clearly positioning itself as the favored bank regulator for digital assets, according to attorneys at law firm Latham & Watkins.
Guardrails under the GENIUS Act
The primary law governing these new stablecoin activities is the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which President Trump signed in July 2025.
The GENIUS Act places specific limits on how chartered banks can operate stablecoin businesses. The law requires issuers to back their outstanding tokens on a one-to-one basis with highly liquid assets, such as U.S. currency or short-term Treasury bills.
The act strictly prohibits stablecoin issuers from paying interest or yield to token holders. Furthermore, the law explicitly subjects issuers to the Bank Secrecy Act, requiring them to maintain robust anti-money laundering and sanctions compliance programs.
For its part, Morgan said Payoneer has no interest in paying out yield. Given the token’s focus on cross-border transactions rather than investment, the company does “not plan to incentivize the holding of stablecoin by passing along any of the yield,” he said.
Banks and consumer advocates push back
Despite these guardrails, traditional banking trade groups strongly oppose the droves of bank charters the OCC has issued.
The largest banks in the U.S. want digital asset firms to seek full-service national banking charters rather than limited-purpose trust licenses if they want to offer bank-like products — an argument made by Paige Pidano Paridon, co-head of regulatory affairs at the Bank Policy Institute.
Community banks argue that stablecoins act as functional substitutes for demand deposits, allowing firms to evade the Bank Holding Company Act and operate as “shadow banks,” according to Mickey Marshall, regulatory counsel at the Independent Community Bankers of America.
Marshall also argued that stablecoins will drain trillions of dollars in core deposits out of local community banks, severely reducing their ability to fund small business and mortgage loans. Payoneer pushed back against these concerns.
PAYO Digital Bank is meant to facilitate cross-border interoperability, according to Morgan, “not to compete with deposits.” He added that PAYO-USD “will not be listed on exchanges or designed to replace deposits,” and emphasized a readiness to partner with community banks to help them leverage tokenization to remain competitive.
Consumer advocates also share concerns, with a focus on the Community Reinvestment Act, from which national trust banks are exempt.
This exemption allows firms such as Bridge and Payoneer to siphon deposits from low- and moderate-income areas without facing any corresponding statutory obligation to lend back to those communities, argues Jesse Van Tol, CEO of the National Community Reinvestment Coalition.
Trade groups also warn that granting a “national bank” label to crypto firms misleads retail consumers into believing their funds carry Federal Deposit Insurance Corp. protection, exposing them to hidden risks in the event of an insolvency or cyberattack.
Melinda Huspen contributed reporting.