Rain is seeking a national trust bank charter to bypass third-party banks
Rain has applied for a national trust bank charter from the OCC to manage digital assets and stablecoin reserves without relying on third-party banks. This move faces opposition from traditional banking groups who argue that crypto firms should not receive banking privileges without standard regulatory obligations.
Why it matters
The application represents a broader trend of crypto firms seeking direct regulatory legitimacy, which is currently a major point of contention in U.S. financial regulation.
TheRain National Trust bank, a proposed New York subsidiary, would provide fiduciary custody of digital assets and U.S. dollars, manage reserves for permitted stablecoin issuers and issue and redeem dollar-backed stablecoins for institutional clients.
The application is part of a broader rush for limited-purpose national trust-bank charters. Circle, Ripple, BitGo and Fidelity were among five crypto firms to receive initial OCC approvals in December. Circle secured final OCC approval to operate its own federal trust bank in late July in New York.
National trust banks are authorized to provide users with custody and fiduciary services but do not accept consumer deposits or make loans like traditional commercial banks.
That means relying less on third parties to hold customers’ assets, administer stablecoin reserves and handle issuance and redemptions. Rain's proposed trust bank would not accept deposits, make commercial loans or offer consumer accounts, and it would not have FDIC insurance.
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