PayPal Bank: Payment Giant Applies for Banking License to Expand Services

TLDR

• PayPal applied for a Utah industrial bank license to create PayPal Bank
• The company plans to offer business loans to small businesses and interest-bearing savings accounts
• Applications are pending with Utah Department of Financial Institutions and FDIC
• Utah industrial banks face same oversight as commercial banks but have fewer activity restrictions
• PayPal already operates PYUSD stablecoin through partnership with Paxos

PayPal, the digital payments company that operates the PYUSD stablecoin, has applied for a Utah industrial bank license. The move would allow the company to create a new lending division called PayPal Bank.

The company announced Monday that it submitted applications to both the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation. PayPal CEO Alex Chriss said the new bank would focus on providing business lending solutions to small businesses.

The planned bank would also offer interest-bearing savings accounts to customers. PayPal currently owns Venmo and already provides credit lines to consumers.

Chriss stated that securing capital remains a major challenge for small businesses trying to grow. He said establishing PayPal Bank would strengthen the company’s business and improve efficiency.

Utah industrial banks operate under the same regulatory oversight as commercial banks. However, they face fewer restrictions on their activities compared to traditional banks.

These institutions are not subject to the Bank Holding Company Act. This federal law regulates banks and prevents monopolization in the banking sector.

PayPal already has a presence in the crypto space beyond its bank application. The company launched PYUSD stablecoin through a partnership with Paxos.

Earlier in 2025, PayPal added wallet-to-wallet crypto transfer functionality. The company also allows users to create personalized links for sending or requesting funds via cryptocurrency.

PayPal introduced a Pay with Crypto feature for merchant services. This service lets merchants accept cryptocurrencies as payment with PayPal acting as an intermediary.

The bank application comes after recent regulatory approvals in the crypto sector. The U.S. Office of the Comptroller of the Currency granted initial trust charters to five crypto firms.

These firms include stablecoin issuers Circle and Paxos, along with Ripple, BitGo and Fidelity Digital Assets. PayPal’s partner Paxos was among the companies receiving approval.

PayPal Holdings, Inc., PYPL

PayPal stock rose 1.5% in extended trading after the announcement. The company reported quarterly revenue of $8.42 billion in October, up 7% year over year.

Despite beating analyst expectations in the third quarter, PayPal stock has declined about 29% in 2025. The S&P 500 index gained almost 16% during the same period.

The company competes with a growing number of fintech companies offering banking-like services. Many of these firms aim to take business from traditional brick-and-mortar banks.

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