PayPal Applies for Utah Bank License to Launch Lending Arm

Payments giant PayPal (NASDAQ: PYPL) has applied for a Utah industrial bank license as part of its plan to establish a new lending division called PayPal Bank, according to a statement released Monday. The move signals PayPal’s intent to deepen its role in financial services by expanding business lending options and offering interest-bearing savings accounts to customers across the United States.

If approved, PayPal Bank would focus on providing small business lending solutions, addressing what the company describes as one of the biggest challenges facing entrepreneurs today: access to capital. PayPal CEO and President Alex Chriss said securing funding remains a major obstacle for small businesses seeking to grow and scale, and the new bank would help improve PayPal’s efficiency while supporting broader economic opportunity.

In addition to the Utah industrial bank application, PayPal has also applied for deposit insurance through the Federal Deposit Insurance Corporation (FDIC). Utah industrial banks operate under the same regulatory and supervisory oversight as commercial banks, but they are not subject to the Bank Holding Company Act. This exemption allows parent companies greater flexibility in their business activities compared with traditional federally regulated banks.

The banking push comes as PayPal continues to expand its crypto and digital asset offerings. While the company’s announcement did not directly reference cryptocurrency, PayPal has been steadily increasing its crypto footprint. It currently operates the PYUSD stablecoin through a partnership with Paxos and has rolled out wallet-to-wallet crypto transfers, crypto-based payment links, and a Pay with Crypto feature that allows merchants to accept digital currencies through PayPal as an intermediary.

PayPal also plans to work more closely with credit card networks as part of its broader financial services strategy, further integrating payments, lending, and savings under one platform.

The application follows recent regulatory developments in the U.S. crypto and banking space. Just days earlier, the Office of the Comptroller of the Currency granted preliminary trust charters to several major crypto firms, including Circle, Paxos, Ripple, BitGo, and Fidelity Digital Assets. Together, these moves highlight a growing convergence between traditional finance, fintech, and digital assets, with PayPal positioning itself at the center of that shift.