Payward, the parent company of the Kraken cryptocurrency exchange, filed an application with the Office of the Comptroller of the Currency of the United States (OCC) on May 8 to obtain a national trust company license, in a bid to expand its regulated digital asset custody business.
According to the releaseIf the company receives approval, the firm would launch Payward National Trusth Company (PNTC), a federally supervised entity focused on trust and custody services for digital assets.
According to Kraken, The objective is to serve mainly institutions and clients that demand protection standards similar to those of traditional banking, under direct regulation by the OCC. On the other hand, he explained that this action is part of a “multiple licenses” strategy, designed to offer different financial services regulated at both the state and federal levels.
If completed, PNTC would leverage the compliance, risk management and custody infrastructure already developed by the company, in addition to facilitating access to clients who require qualified custodians under federal supervision.
Arjun Sethi, co-CEO of Payward and Kraken, said: a national trust company provides legal security that institutions require and helps build the necessary infrastructure for the new generation of digital custody services.
“A national trust company provides the certainty that institutions need and establishes the infrastructure necessary to build the next generation of custody services. It is not about being first, but about developing the right framework so that markets can grow with clarity, interoperability and a long-term vision for what clients will demand as these systems mature.”
Arjun Sethi, co-CEO of Payward and Kraken.
The initiative is part of Payward’s regulatory expansion strategy in the United Statesin a context where companies in the ecosystem seek traditional financial licenses to attract institutional clients and adapt to an evolving regulatory landscape.
The decision also coincides with a “more favorable” political environment towards the digital assets industry under the Donald Trump administration, which has prompted multiple companies in the sector to apply for federal permits and approvals related to banking services.
The future trust company would complement Kraken Financial, the special purpose depository institution created in Wyoming in 2020. This entity became the first bank specializing in digital assets to gain direct access to the Federal Reserve payments system through a master account, as CriptoNoticias explained.
Payward’s move to expand its federal regulatory structure also comes after criticism that arose when Kraken Financial gained access to the Federal Reserve’s payments system. At that time, banking associations Americans expressed concern about the access of entities linked to the ecosystem to traditional financial infrastructure through special regulatory frameworks, a debate that continues to shape the relationship between the digital assets industry and the US banking system.