- PayPal filed in Utah to launch PayPal Bank as an industrial loan company
- The plan targets small business loans, working capital, and interest-bearing savings
- PayPal ties the move to efficiency and less reliance on third-party bank partners
PayPal Holdings Inc. NASDAQ: PYPL has applied for industrial banking services in Utah, aiming to expand small business lending by reducing reliance on third-party partners.
PayPal Files to Launch an Industrial Loan Company in Utah
PayPal announced on Monday, December 15, 2025 that it submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to launch PayPal Bank, a proposed Utah-chartered industrial loan company.
The proposed PayPal Bank would focus on U.S. small businesses through loans and working capital. PayPal also said PayPal Bank would offer interest-bearing savings accounts, with customer deposits eligible for FDIC insurance coverage if approved.
Related: YouTube Lets U.S. Creators Get Paid in PayPal’s Stablecoin PYUSD
“Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the U.S,” Alex Chriss, President and Chief Executive Officer at PayPal, noted.
Why PayPal Wants a Bank Charter Now
PayPal Pitches an Edge Over DeFi Lending
PayPal has faced sharper competition from decentralised finance over the past few years, as crypto-native lending platforms pulled more activity on-chain. DefiLlama data shows Aave V3 total value locked at about $53 billion, a measure of capital committed to a DeFi protocol.
On the other hand, PayPal has existed since the dotcom internet boom and has also facilitated access to at least $30 billion in loans and working capital globally. If approved, the PayPal Bank will have an edge of more than 420,000 global business accounts.
Additionally, the PayPal Bank will likely benefit from the PayPal USD (PYUSD) stablecoin. According to market data from CoinMarketCap, the PYUSD had a market cap of around $3.87 billion, and its 24-hour average trading volume surged by over 99% to around $66 million.
The PayPal Bank will likely scale its operations with the help of PYUSD. Moreover, PYUSD is available on several chains including Ethereum (ETH), Solana (SOL), Arbitrum (ARB), and Stellar (XLM). The use of a stablecoin to facilitate lending operations will ensure PayPal Bank is operational on holidays and weekends.
Utah and U.S. Regulatory Signals Matter for Stablecoins
PayPal is seeking to explore industrial loaning business, potentially with the help of its PYUSD stablecoin, due to the notable regulatory clarity in the United States. The ongoing implementation of the GENIUS Act has helped more institutions, especially traditional financial companies, to explore the stablecoins market legally.
The state of Utah already treats digital assets as legal financial assets under its property law. As such, the PayPal Bank is well-positioned to be approved within a short period.
Related: PayPal Partners With OpenAI to Bring Instant Checkout to ChatGPT as Stock Surges
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Source: https://coinedition.com/paypal-files-utah-industrial-bank-charter-lending-pyusd/
