Rain Files for National Trust Bank Charter as Legal Battle Over Crypto Banking Intensifies
Stablecoin infrastructure provider Rain seeks OCC approval for a national trust bank charter, even as community banks launch a legal challenge to the regulatory framework enabling such approvals.
Rain Pursues National Trust Bank Charter
Stablecoin payments infrastructure provider Rain has submitted an application to establish a national trust bank headquartered in New York, according to the Office of the Comptroller of the Currency. The filing positions Rain among an expanding roster of crypto companies seeking federal bank charters as the industry continues to mature.
If approved by the OCC, Rain National Trust Bank would provide fiduciary custody of digital assets and US dollars for institutional clients, manage reserves for stablecoin issuers, and issue and redeem dollar-backed stablecoins in compliance with the GENIUS Act. Brandon Soto, the former chief financial officer of Square Financial Services, will lead the proposed bank as president and CEO, subject to OCC review.
“The institutions building on Rain want the assets behind their programs held by a fiduciary that answers to a federal regulator,” explained Rain CEO and co-founder Farooq Malik. The statement underscores the sector’s emphasis on institutional-grade custody and regulatory transparency.
Community Banks Challenge the Regulatory Framework
Rain’s charter application arrives amid escalating legal scrutiny of the approval process. The Independent Community Bankers of America filed a lawsuit against the OCC on Friday, challenging the regulator’s authority to permit non-depository trust banks to conduct extensive non-fiduciary activities. The lawsuit, filed in US District Court for the District of Columbia against the OCC and Comptroller Jonathan Gould, contests the agency’s March 2026 chartering final rule and a 2021 interpretive letter.
The ICBA argues the regulatory framework creates an uneven competitive landscape, allowing crypto and digital asset companies to enter the banking sector under less stringent requirements than traditional banks face. The group also raised concerns that consumers might mistake the “national bank” designation for federal deposit insurance protection—a distinction that could expose retail participants to misplaced confidence in asset safety.
Industry Expansion Amid Regulatory Friction
Rain’s application joins other filings from crypto and payments firms pursuing bank charters as part of a broader strategy to gain access to regulated financial infrastructure. Modern Treasury, a payments infrastructure company, announced on Monday that it had also submitted an application seeking approval to offer digital asset custody and related fiat services. The wave of filings reflects the industry’s determination to integrate deeper into the traditional financial system.
According to the ICBA’s complaint, the OCC has approved or conditionally approved at least 21 trust banks, with at least 13 being crypto companies. Despite the legal challenge, the Crypto Council for Innovation characterized the ICBA lawsuit as an attempt to stifle innovation, signaling the industry’s commitment to defending its regulatory gains and expanding institutional banking access for crypto operations.
Successfully integrating crypto infrastructure into the regulated banking system through trust bank charters could accelerate mainstream institutional adoption and establish deeper connections between crypto services and traditional finance.
Source: OCC, via Cointelegraph. Not financial advice.