Crypto Firm Rain Files for Federal Trust Charter Amid Legal Battle Over OCC Regulations
Digital asset payment infrastructure company Rain has submitted its application for a national trust bank charter in the United States, even as traditional community banking institutions are challenging the Office of the Comptroller of the Currency's regulatory approach to cryptocurrency-focused trust banking entities.
Rain, a provider of payment infrastructure solutions for stablecoins, has submitted documentation to federal banking regulators seeking authorization to launch a national trust banking institution with its headquarters located in New York, joining an expanding roster of cryptocurrency-related businesses pursuing federal bank charters during the past twelve months.
In an announcement made on Monday, Rain disclosed that it had submitted the necessary paperwork to the Office of the Comptroller of the Currency (OCC) for the purpose of establishing what will be known as Rain National Trust Bank. Should regulatory approval be granted, the institution would gain authorization to offer fiduciary custody services for both digital assets and United States dollars on behalf of institutional customers, deliver reserve management capabilities for stablecoin issuers who meet eligibility requirements, and both issue and redeem stablecoins backed by US dollars in compliance with the provisions outlined in the GENIUS Act.
Brandon Soto, who previously held the position of chief financial officer at Square Financial Services, has been designated to assume the roles of president and chief executive officer of the prospective national trust banking institution, pending the completion of the OCC's review process.
The institutions building on Rain want the assets behind their programs held by a fiduciary that answers to a federal regulator
Rain CEO and co-founder Farooq Malik
Rain's application places the company among an increasingly large group of cryptocurrency and payment service providers that are actively pursuing national trust bank charter authorizations. Modern Treasury, another payments infrastructure enterprise, similarly revealed on Monday that it had filed its own application requesting authorization to provide digital asset custody services along with associated fiat currency offerings.
Community banks challenge OCC over crypto trust charters
Nevertheless, this movement toward cryptocurrency banking charters has encountered resistance from organizations representing traditional community banking institutions. Last Friday, the Independent Community Bankers of America initiated legal proceedings against the OCC, claiming that the regulatory agency has overstepped the boundaries of its statutory authority by permitting non-depository trust banking entities to engage in extensive non-fiduciary business activities.
The legal action was initiated in the United States District Court for the District of Columbia, naming both the OCC and Comptroller Jonathan Gould as defendants in the case.
The ICBA contended that the OCC's National Bank Chartering final rule in conjunction with an interpretive letter 1176, 2021, "perversely allow entities engaged in highly risky cryptocurrency and digital assets activities to enter the banking system under lightly regulated national charters rather than the more rigorously regulated traditional bank charter."
According to the ICBA's position, the regulatory framework provides crypto-focused trust banking institutions with unfair competitive advantages by permitting them to deliver services that directly compete with those offered by community banks while simultaneously avoiding equivalent regulatory requirements. The organization further contended that consumers might be misled by the "national bank" designation into believing their assets carry federal insurance protection.
The organization has petitioned the court to invalidate the OCC's March 2026 chartering rule as well as the 2021 interpretive letter, and to block any additional charter approvals that depend upon these regulatory frameworks.
In a statement released on Monday, the Crypto Council for Innovation characterized the lawsuit as an effort to suppress innovation within the financial services sector.
Based on information contained within the ICBA's legal complaint, the OCC has granted approval or conditional approval to no fewer than 21 trust banking institutions, with a minimum of 13 of those entities being cryptocurrency-focused companies.