Stablecoin Firm Rain Files for Federal Trust Bank Charter Amid Industry Legal Battle

TLDR

• Rain submitted an application to the OCC on Monday for Rain National Trust Bank, which would be headquartered in New York.
• The institution would provide digital asset custody services, hold stablecoin reserves, and issue dollar-pegged stablecoins under GENIUS Act provisions.
• The application arrives three days after the Independent Community Bankers of America launched litigation against the OCC challenging its crypto trust charter framework.
• Brandon Soto, who previously served as CFO at Square Financial Services, has been designated as the prospective president and CEO.
• Rain becomes the latest in a series of companies including Circle, Agora, and Zerohash pursuing federal trust bank charters.

Rain, a company specializing in stablecoin payment infrastructure, has submitted an application for a national trust bank charter in the United States. The filing was made with the Office of the Comptroller of the Currency on Monday.

Should the application receive approval, the institution will operate under the name Rain National Trust Bank. The trust bank will establish its headquarters in New York and function under OCC oversight.

Rain as a parent company will maintain its current structure. The trust bank will function as a separately capitalized subsidiary entity.

Core Functions of the Planned Institution

The proposed bank will provide fiduciary custody services for digital assets and US dollars on behalf of institutional clients. It will also hold reserves for authorized stablecoin issuers.

The institution plans to issue and redeem stablecoins backed by US dollars in accordance with the GENIUS Act framework. All client assets will be maintained separately from the bank’s proprietary holdings.

Rain clarified that the bank will not accept traditional deposits or provide consumer banking products such as checking and savings accounts. The institution will also refrain from commercial lending activities.

Consequently, the bank will not carry FDIC deposit insurance coverage. Its operations will be limited to those of an uninsured national trust bank.

Farooq Malik, Rain’s CEO and co-founder, explained that businesses utilizing Rain’s infrastructure are seeking fiduciary custody arrangements with institutions accountable to federal regulators.

Brandon Soto has been designated as the prospective president and chief executive officer. His background includes serving as CFO at Square Financial Services and subsequently at Coastal Financial Corporation. His appointment remains subject to OCC approval.

Legal Challenge Targets Charter Framework

Rain’s application was submitted just three days following a lawsuit filed by the Independent Community Bankers of America against the OCC. The legal action was initiated on October 2 in the US District Court for the District of Columbia.

The banking association contends that the OCC’s March 2026 chartering regulation permits cryptocurrency firms to access the banking system under less stringent supervision compared to traditional banking institutions. The group also raises concerns that consumers may incorrectly associate the designation “national bank” with federal deposit insurance coverage.

The litigation identifies the OCC and Comptroller Jonathan Gould as defendants. The plaintiffs are seeking judicial invalidation of the regulation and a related interpretive letter issued in 2021.

The OCC stated in February that the regulation merely clarified its pre-existing authority. The regulatory body maintained that the rule neither expanded nor contracted its chartering jurisdiction.

An OCC representative indicated that the agency does not provide comments on active litigation matters.

Rain is far from alone in pursuing this charter category. Circle obtained final regulatory approval earlier this year for its own national trust bank, designated as Circle National Trust.

Agora secured conditional approval in September. Zerohash filed a revised application in August following the return of an initial submission by regulators.

Based on information in the community bankers’ legal filing, the OCC has granted full or conditional approval to no fewer than 21 trust banks. A minimum of 13 of these institutions are cryptocurrency-focused enterprises.

Rain’s application will undergo a public comment period as part of the OCC’s standard evaluation procedures. The company has not disclosed a projected timeline for a regulatory decision.

Rain indicated that its existing card, wallet, and money transfer operations will remain unaffected during the application review period. The company characterized the trust bank initiative as a multi-year undertaking that will only commence operations after securing all necessary regulatory approvals.