Three days after a US community banking association sued the Office of the Comptroller of the Currency (OCC), payment infrastructure firm Rain moved forward with an application to the regulator. Rain is seeking approval to establish the New York-based Rain National Trust Bank, a move designed to gain direct custody of crypto assets and US dollars held for its institutional clients.
Rain currently serves business partners that interface directly with millions of end users. However, its day-to-day operations still rely on a mix of state-level licenses, third-party custodians, and external stablecoin issuers. Rain CEO Farooq Malik stated that institutional clients are demanding stronger security guarantees. “Institutions building on Rain want the assets backing their programs held by a fiduciary accountable to a federal regulator,” he said.
The target market for Rain National Trust Bank is highly specialized. The institution will exclusively serve institutional clients by providing fiduciary custody for digital assets and US dollars, managing reserves for stablecoin issuers, and issuing and redeeming dollar stablecoins under the provisions of the GENIUS Act. It will not accept public deposits, offer consumer checking or savings accounts, or issue commercial loans. Given this narrow scope, the bank will operate without FDIC insurance. Rain has also nominated Brandon Soto - former chief financial officer of Square Financial Services and Block’s Utah-based industrial bank - as president and CEO, pending final OCC approval.
Pushing Ahead Amid Regulatory Lawsuit
Rain’s move comes amid escalating tensions between regulators and traditional banks. On Oct. 2, 2026, the Independent Community Bankers of America (ICBA) formally filed a lawsuit in the US District Court for the District of Columbia. The ICBA alleged that the OCC exceeded its statutory authority by permitting non-depository trust banks to engage in extensive non-fiduciary activities with minimal oversight.
The community banking group’s lawsuit targets the legal foundation of crypto firms. They are urging the court to invalidate the March 2026 chartering rule and rescind Interpretive Letter 1176 issued in 2021. More aggressively, the association is asking the court to bar the OCC from approving similar charters in the future.
Rain Is Not the Only One in Line
The lawsuit landed after the OCC had already approved at least 21 trust banks. ICBA’s complaint reveals that at least 13 of those new banks are crypto-native entities. USDC issuer Circle previously secured final OCC approval to establish First National Digital Currency Bank and Circle National Trust in July 2026.
Other companies continue to join the queue. Agora received conditional approval in September, while Zerohash filed a revised application in August. On the same Monday Rain made its announcement, payment platform Modern Treasury also disclosed a similar filing with the OCC.
This growing backlog of applications highlights the crypto industry’s strong appetite to secure a permanent foothold within the US mainstream banking system. For major players, operating their own bank is the only way to eliminate reliance on third parties - despite fierce resistance from incumbent financial institutions.
Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
