Rain is seeking a national trust bank charter to bypass third-party banks
In this news:
Key takeaways
- Rain has applied for an OCC national trust-bank charter.
- The proposed New York subsidiary would handle digital asset custody and stablecoin operations.
- National trust banks provide fiduciary services without accepting consumer deposits or making loans.
Stablecoin payments company Rain is the latest crypto company to seek an Office of the Comptroller of the Currency (OCC) trust-bank charter, joining a growing group of firms trying to bring custody and stablecoin operations under federal supervision.
The Rain 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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