Stablecoin firm Rain applies for OCC trust bank charter to cut third-party reliance
In brief
- Rain applied for an OCC trust-bank charter for Rain National Trust bank, a proposed New York subsidiary.
- Rain National Trust would custody digital assets and dollars and issue and redeem stablecoins for institutions.
- The proposed bank wouldn't take deposits, make commercial loans or carry FDIC insurance, per CoinDesk.
- The ICBA sued the OCC last week, arguing the regulator lacks authority to charter such crypto firms.
- Rain's application still needs OCC approval and must go through a public-comment period.
What Rain is asking for
So what does Rain actually get if the OCC approves it? A trust charter would mean relying less on third parties to hold customers' assets, administer stablecoin reserves and handle issuance and redemptions, according to CoinDesk.
It isn't a commercial bank charter.
National trust banks can provide custody and fiduciary services, but they don't accept consumer deposits or make loans the way traditional commercial banks do. Rain's proposed bank wouldn't accept deposits, make commercial loans or offer consumer accounts, and it wouldn't have FDIC insurance. Rain said assets held for clients would be kept separate from the bank's own assets.
A crowded line at the OCC
Rain is the latest in a growing group of firms trying to bring custody and stablecoin operations under federal supervision. CoinDesk described the filing as part of a broader rush for limited-purpose national trust-bank charters (a niche license that's suddenly in demand across crypto).
Circle, Ripple, BitGo and Fidelity were among five crypto firms that received initial OCC approvals in December. Circle then secured final OCC approval in late July to operate its own federal trust bank in New York.
Community banks push back
Traditional lenders don't like the charter route. It's drawn opposition from banks across the United States, and the Independent Community Bankers of America (ICBA) sued the OCC last week, CoinDesk reported. The ICBA argues the agency lacks authority to grant national trust charters to crypto firms that don't offer traditional banking services, and it says the structure gives crypto companies banking privileges without the same obligations lenders face.
Rain's application still needs OCC approval and has to go through a public-comment period.
Frequently asked questions
What can a national trust bank do that Rain's proposed bank would rely on?
National trust banks can provide custody and fiduciary services. They don't accept consumer deposits or make loans like traditional commercial banks. Rain says its proposed bank wouldn't accept deposits, make commercial loans or offer consumer accounts, and it wouldn't have FDIC insurance.
Why are community banks opposing OCC trust charters for crypto firms?
CoinDesk reported that the Independent Community Bankers of America sued the OCC last week. The ICBA argues the agency lacks authority to grant national trust charters to crypto firms that don't offer traditional banking services. It also says the structure gives crypto companies banking privileges without the same obligations lenders face.
