Rain Aims for U.S. Trust Bank Charter Amid Crypto Regulatory Push

Rain, a stablecoin infrastructure provider, has filed an application with the U.S. Office of the Comptroller of the Currency (OCC) to establish a national trust bank in New York. The proposed Rain National Trust Bank aims to offer custody services for digital assets and U.S. dollars, manage reserves for stablecoin issuers, and issue dollar-backed stablecoins under the GENIUS Act framework. If approved, the bank would provide federally regulated custody solutions for institutional customers, potentially reshaping stablecoin-related custodial and reserve arrangements.

The application comes amid a broader trend of crypto and payments firms seeking trust bank charters. Rain's leadership for the proposed bank includes Brandon Soto, former CFO of Square Financial Services, subject to OCC review. Rain CEO Farooq Malik emphasized the importance of fiduciary oversight, stating that institutions want assets held by a federally regulated entity.

However, the push for trust bank charters faces legal resistance. The Independent Community Bankers of America (ICBA) has sued the OCC, arguing that the regulator's approach allows crypto-related activities under lightly regulated charters, potentially eroding protections associated with traditional bank charters. The lawsuit seeks to overturn the OCC’s chartering rule and prevent further approvals.

Industry groups are divided on the issue. Supporters argue that charters enable regulated innovation, while opponents warn of potential risks. The outcome of Rain's application and the ICBA lawsuit will determine the future of regulated banking rails for stablecoin services in the U.S.