By Rain seeks U.S. trust bank amid crypto charter lawsuit
Rain has filed an application to create a U.S. national trust bank that could custody digital assets, manage stablecoin reserves and issue dollar-backed stablecoins if the Office of the Comptroller of the Currency approves the plan.
Summary
- Rain has applied for a national trust bank charter to custody assets and issue stablecoins.
- Rain National Trust Bank would not accept deposits, offer consumer accounts, or make commercial loans.
- The proposed bank could manage reserves for permitted stablecoin issuers under the federal GENIUS Act.
- Community bankers sued the OCC days earlier, challenging rules supporting crypto national trust bank charters.
- The OCC says its April charter rule clarified existing authority and did not expand powers.
According to Rain’s Oct. 5 announcement, the proposed Rain National Trust Bank would be headquartered in New York and operate as a separately capitalized subsidiary under OCC supervision. Rain itself would remain a stablecoin payments platform and would not become the bank.
The application arrived three days after the Independent Community Bankers of America filed a federal lawsuit challenging the legal framework the OCC uses for national trust bank charters, placing Rain’s bid into an expanding dispute over how crypto and payments firms can enter the federal banking system.
Rain trust bank could hold reserves and issue stablecoins
If approved, Rain National Trust Bank would have three main business lines serving institutional clients, according to the company.
The bank would provide fiduciary custody for approved digital assets and U.S. dollars, with client property separated from its own assets. It could manage reserves for permitted stablecoin issuers and act as the issuer of record for U.S. dollar-backed stablecoins under the GENIUS Act.
Rain CEO and co-founder Farooq Malik said customers using the company’s infrastructure want assets supporting their programs held by a fiduciary overseen by a federal regulator. He described the proposed bank as a separate operation that would hold client assets under OCC examination.
Rain currently provides infrastructure for stablecoin cards, wallets and money transfers. The company said partners serving millions of end users currently rely on a combination of state licenses, outside custodians and third-party stablecoin issuers. Its charter application seeks permission to bring some of those functions into the proposed federal trust bank.
The company has named Brandon Soto as proposed president and CEO, subject to OCC review. Soto previously served as chief financial officer of Square Financial Services, Block’s Utah-chartered industrial bank, and later held the CFO role at Coastal Financial Corporation.
OCC charter would not turn Rain into a regular bank
Despite the proposed bank name, Rain National Trust Bank would not operate like a traditional consumer bank.
Rain said the institution would not accept deposits, provide checking or savings accounts, offer consumer accounts or make commercial loans. It would operate as an uninsured national trust bank, meaning it would not carry FDIC deposit insurance.
Assets placed in custody would remain identified as client assets instead of becoming liabilities of the bank. Rain said reserves supporting any stablecoin issued by the proposed institution would not be pledged, lent or reused.
The structure resembles other crypto-focused national trust bank applications moving through the OCC. As previously reported by crypto.news, the regulator has processed applications from digital asset and payments companies seeking custody, settlement and stablecoin-related powers without taking conventional deposits.
Circle has already moved further through that process. In July, the stablecoin issuer received final OCC approval for First National Digital Currency Bank, which operates as Circle National Trust. Crypto.news reported at the time that the bank would begin with fiduciary digital asset custody and could later serve selected institutional clients.
Other applicants remain at different stages. Agora received preliminary conditional approval in September after filing its application in April, while Zerohash submitted a revised application in August after the OCC returned an earlier filing.
Rain application comes as crypto charters face a court fight
Rain’s filing comes as community banks are challenging the OCC’s authority to approve national trust banks whose activities extend beyond traditional fiduciary services.
The Independent Community Bankers of America sued the OCC and Comptroller Jonathan Gould on Oct. 2 in the U.S. District Court for the District of Columbia. The case, Independent Community Bankers of America v. Office of the Comptroller of the Currency, was assigned case number 1:2026cv03441 to Judge Carl J. Nichols.
The complaint challenges a March 2026 OCC rule, Interpretive Letter 1176 and the conditional approval granted to Protego Holdings. ICBA argues that the agency has “far exceeded” its authority by allowing national trust banks to conduct non-fiduciary activities under a limited-purpose charter. The allegations have not been decided by the court.
ICBA wants the court to find the March rule and Interpretive Letter 1176 unlawful. Its complaint seeks to stop the OCC from relying on the disputed framework for additional approvals and asks the court to vacate Protego’s conditional charter approval.
The OCC takes a different view of its powers. In its February bulletin announcing the rule, the regulator said the change merely clarifies its longstanding authority to let national trust banks conduct non-fiduciary activities alongside fiduciary work. The agency expressly said the rule neither expands nor contracts its chartering authority. It took effect April 1.
An OCC spokesperson said Monday that the agency does not comment on litigation, according to Banking Dive. Comptroller Gould has previously defended the agency’s approach to trust bank applications, saying the OCC assesses whether applicants have a reasonable chance of success instead of applying a zero-risk standard.
The legal fight follows months of objections from banking groups. Crypto.news reported in July that banking industry representatives were considering legal action after a series of crypto and fintech companies sought or received national trust bank charters.
Rain now faces OCC review and a public comment period
Rain’s application still requires OCC approval before the proposed bank can begin business.
The company said the review will include a public comment period, with the public portion of its application expected to appear on the OCC website. Rain has not provided a date for an OCC decision, and the regulator follows its own review timetable.
Rain worked with law firm Paul Hastings to prepare the application. Soto’s appointment as president and CEO remains subject to OCC review, while the proposed bank must receive all required regulatory approvals before starting operations.
The federal court challenge remains at an early stage. Public docket records show ICBA filed its complaint on Oct. 2, followed by attorney appearances and electronically issued summonses to the defendants and federal officials.
Rain said its national trust bank project is a multi-year initiative. Its existing card, wallet and money-movement programs will remain in place while the OCC reviews the charter application, and the company said the proposed bank would begin operating only after receiving all required approvals.
