Rain Signals Shift to U.S. Trust Charter Days After OCC Crypto Suit

Rain, a stablecoin payments infrastructure provider, has applied to establish a new national trust bank in New York—an effort that would place more stablecoin and digital-asset services under the oversight of the U.S. Office of the Comptroller of the Currency (OCC). The move adds to a broader push from crypto and payments firms seeking trust bank charters over the past year.

In its filing made Monday, Rain said it submitted an application to the OCC to create “Rain National Trust Bank.” If approved, the bank would be positioned to offer fiduciary custody of both digital assets and U.S. dollars for institutional customers, manage reserves for permitted stablecoin issuers, and issue and redeem dollar-backed stablecoins in line with the framework of the GENIUS Act.

Key takeaways

• Rain filed with the OCC to establish Rain National Trust Bank, aiming to bring custody, reserve management, and dollar-backed stablecoin functions under a federal trust structure.
• If approved, Rain’s proposed bank would seek authority to provide fiduciary custody for digital assets and U.S. dollars, and to support reserve management for permitted stablecoin issuers.
• The bank charter drive is unfolding amid legal resistance from community banks, including a lawsuit challenging the OCC’s crypto-related chartering approach.
• Rain’s proposed leadership includes Brandon Soto, formerly CFO of Square Financial Services, pending OCC review.
• Industry groups are split: supporters argue charters enable regulated innovation, while opponents warn they may erode protections associated with more traditional bank charters.

Rain seeks OCC approval for a trust bank focused on stablecoin rails

Rain said its application was filed with the OCC on Monday to establish Rain National Trust Bank, headquartered in New York. Rain’s stated scope—custody of digital assets and U.S. dollars, reserve management for permitted stablecoin issuers, and the issuance and redemption of dollar-backed stablecoins consistent with the GENIUS Act—signals an intent to move beyond infrastructure services into a regulated balance-sheet and custody-adjacent role.

Rain also named leadership for the proposed institution. The company said Brandon Soto, formerly chief financial officer of Square Financial Services, would serve as president and chief executive officer, subject to the OCC’s review process.

Rain CEO and co-founder Farooq Malik framed the rationale around the value of fiduciary oversight: institutions “building on Rain want the assets behind their programs held by a fiduciary that answers to a federal regulator.”

For investors and market participants, the practical significance is that trust bank charters can change how stablecoin-related custodial and reserve arrangements are structured. Instead of relying solely on third-party custody or off-balance-sheet arrangements, a regulated trust bank could provide a different compliance and governance posture—especially for institutions seeking federally supervised handling of both fiat and tokenized assets.

A wider wave of trust charters for custody and fiat settlement

Rain’s application comes as other crypto and payments businesses have also pursued national trust bank charters. Modern Treasury, a payments infrastructure company, announced Monday that it had submitted an application seeking approval to provide digital asset custody and associated fiat services.

Taken together, the filings underscore a trend: stablecoin ecosystems and digital asset custody platforms are increasingly targeting regulated banking structures that could support fiat handling and custody in a way that’s more legible to traditional finance stakeholders. While each proposal’s final boundaries depend on the regulator’s approval, the pattern suggests that stablecoin-related businesses view trust charters as a pathway to institutional adoption.

Community banks push back through litigation over OCC authority

Even as crypto-linked firms pursue trust bank charters, the approach has encountered active opposition. On Friday, the Independent Community Bankers of America (ICBA) sued the OCC, alleging the regulator exceeded its authority by allowing non-depository trust banks to perform extensive activities beyond what the organization says a trust charter should cover.

According to the lawsuit, filed in the U.S. District Court for the District of Columbia against the OCC and Comptroller Jonathan Gould, ICBA argues that the OCC’s National Bank Chartering final rule and 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.”

ICBA’s complaint highlights two concerns. First, it claims the charter framework gives crypto trust banks a competitive advantage by allowing overlapping services with community banks while avoiding regulatory obligations that community institutions would face. Second, the group argues consumers could misinterpret the “national bank” label as a sign that assets are federally insured, even when that assurance may not apply in the same way it does for traditional insured depository banks.

In terms of remedies, ICBA asked the court to overturn the OCC’s March 2026 chartering rule and the 2021 interpretive letter, and to prevent additional charter approvals that rely on them.

Supporters say the lawsuit aims to slow regulated innovation

The litigation has also drawn criticism from crypto policy and advocacy groups. On Monday, the Crypto Council for Innovation said the lawsuit was an attempt to stifle innovation.

As part of the ICBA’s argument, the complaint states the OCC has approved or conditionally approved at least 21 trust banks, and that at least 13 are crypto companies. This figure—if accepted at face value in the complaint—helps explain why community banks are framing the issue as systemic rather than isolated: they argue that the pace and scale of trust charter approvals are reshaping competitive dynamics between community banks and chartered crypto-adjacent institutions.

What remains uncertain is how courts will evaluate the OCC’s chartering authority and how any rulings could affect pending applications, conditional approvals, or the regulatory standards used to assess future filings. For firms in the process, that legal uncertainty matters as much as regulatory timelines.

Going forward, investors and builders should watch two parallel tracks: the OCC’s review of Rain’s application (and what conditions, if any, it attaches), and the legal outcome of the ICBA challenge that questions the foundation for crypto-related trust charters. Together, these developments will determine how quickly regulated banking rails for stablecoin services expand—and how durable those pathways are under judicial scrutiny.