Rain Becomes 12th Crypto Firm Seeking a US Bank Charter as Banks Sue OCC
October 7, 2026
A Stablecoin Payments Firm Asks to Become a Bank
Rain, a company that builds stablecoin payment infrastructure, has applied to the US Office of the Comptroller of the Currency (OCC) for a national trust bank charter. The filing landed days after the main lobby group for America’s small banks sued that same regulator to close the route off. The timing makes Rain’s paperwork bigger than itself. It is now a live test of whether crypto firms can keep walking through a federal door that community banks are actively trying to bolt shut.What Rain Is Actually Asking For
The proposed entity, Rain National Trust Bank, would sit in New York as a subsidiary of the payments company, according to CoinDesk. If the OCC signs off, it would hold digital assets and US dollars in custody for institutional clients, manage the reserves that back permitted stablecoins, and issue and redeem dollar-backed tokens under the GENIUS Act. It would not look much like a high street bank. No consumer accounts, no commercial lending, no deposits and no FDIC insurance. Client assets would be kept separate from the bank’s own holdings. Former Square Financial Services chief financial officer Brandon Soto is lined up to run it as president and chief executive, subject to regulator review. Rain CEO and co-founder Farooq Malik framed the motive in institutional terms, saying the firms building on Rain “want the assets behind their programs held by a fiduciary that answers to a federal regulator.”What a National Trust Bank Does, in Plain Terms
This is the part worth slowing down on, because most people don’t use a trust bank. A normal bank takes your money as a deposit, lends most of it out, and profits from the gap between what it pays savers and what it charges borrowers. A trust bank does not do that. It holds assets on behalf of someone else and is legally bound to act in that person’s interest, which is what “fiduciary” means. Think of it as a vault with a rulebook, not a lender. For a stablecoin issuer, that distinction matters. Every token in circulation should be matched by real dollars held somewhere safe. Today, much of that cash sits with third-party banks, meaning the issuer depends on partners it doesn’t control. A federal charter would let Rain hold and move those reserves itself, under one regulator. The same logic drove Deutsche Bank’s plan to custody Bitcoin and Ether in Europe: whoever holds the assets controls the relationship.
Community Banks Take the OCC to Court
On Oct. 2, the Independent Community Bankers of America filed suit against the OCC and Comptroller of the Currency Jonathan Gould in the US District Court for the District of Columbia, Cointelegraph reported. The complaint goes after the machinery rather than any single company. It challenges the OCC’s March 2026 chartering rule and a 2021 interpretive letter, numbered 1176, that opened the door to trust charters for firms without traditional banking operations. ICBA argues the agency misread the law and that crypto trust banks end up with banking privileges while carrying lighter obligations than lenders. The group is asking the court to overturn those OCC rules and block future approvals granted under them.Twenty-One Charters, Thirteen Crypto Firms
The numbers explain why small banks are agitated. The OCC has approved or conditionally approved 21 trust banks, and 13 of those are crypto companies. CoinDesk counts Rain as the 12th crypto firm currently seeking the charter. Five crypto companies, including Circle, Ripple, BitGo, and Fidelity, received initial approvals in December 2025. Circle converted its application to final approval in late July 2026. That cluster, built over roughly ten months, is what turned a quiet corner of bank regulation into a contested one.Why the Next Few Months Could Reshape the Charter Route
Nothing is settled. Rain’s application still faces OCC review and a public comment period, and the ICBA case has barely started. If the court sides with the regulator, the charter route may become the default way stablecoin issuers and custodians move under federal supervision, and the queue behind Rain could lengthen. If ICBA prevails, approvals granted under the contested framework could be thrown into doubt and firms may be pushed back toward state licences and bank partnerships. A partial ruling could also leave the OCC rewriting its rules while applications sit in the queue, so anyone tracking the latest crypto news around stablecoin policy should expect the timeline to stretch. Either outcome shapes how quickly crypto payments reach ordinary users. The plumbing behind a digital wallet or a stablecoin card depends on who can legally hold the money behind it.The Real Fight Is Over Who Gets to Be Called a Bank
Strip away the acronyms and this is a dispute about a word. Crypto firms argue they are asking for the narrowest version of a bank, one that holds assets and nothing else, and accepting federal supervision in exchange. Community banks argue that the label carries weight the applicants have not earned, and that a charter without deposits, loans or insurance is a shortcut dressed as compliance. Regulators spent years telling crypto companies to come inside the system. Rain’s filing, and the lawsuit it landed beside, show how unresolved the question of what “inside” means still is.
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Madiha Riaz
Madiha is a seasoned researcher in cryptocurrency, blockchain, and emerging Web3 technologies. With a background in organic chemistry and a sharp analytical mindset, she brings scientific depth to decentralized innovation. Since discovering crypto in 2017 and investing in 2018, she’s been uncovering and sharing deep insights into how blockchain is redefining the digital asset landscape.
