Key Highlights
- Firms like Rain and Modern Treasury are actively pursuing national trust bank charters from the Office of the Comptroller of the Currency (OCC) to provide federally regulated custody and fiat services.
- The Independent Community Bankers of America (ICBA) filed a federal lawsuit against the OCC and Comptroller Jonathan Gould, asserting the agency exceeded its authority by granting light-touch charters to risky digital asset firms.
- ICBA’s complaint reveals that the OCC has approved or conditionally approved at least 21 trust banks, including at least 13 cryptocurrency-focused companies.
Crypto and Fintech Firms Seek Federal Trust Charters
Financial technology and digital asset platforms are accelerating efforts to secure federal oversight and trust status. Corporate card and payments platform Rain is among the growing number of crypto and payments companies seeking national trust bank charters to satisfy institutional demand for oversight. Explaining the strategic move, “The institutions building on Rain want the assets behind their programs held by a fiduciary that answers to a federal regulator,” Rain CEO and co-founder Farooq Malik said.
Reinforcing this industry trend, payments infrastructure company Modern Treasury announced on Monday that it has submitted an application for a national trust bank charter. The firm is seeking regulatory approval to offer digital asset custody alongside related fiat banking services, positioning itself to serve institutional clients seeking compliant financial infrastructure.
Community Banks Challenge OCC Over Crypto Trust Approvals
However, the influx of digital asset firms into federal banking channels has encountered sharp resistance from established lenders. On Friday, the Independent Community Bankers of America (ICBA) sued the Office of the Comptroller of the Currency (OCC), alleging that the regulator overstepped its statutory powers by permitting non-depository trust banks to execute broad non-fiduciary operations. The legal action was formally filed in the U.S. District Court for the District of Columbia against both the OCC and Comptroller Jonathan Gould.
In its filing, the ICBA argued that the OCC’s National Bank Chartering final rule along with its 2021 Interpretive Letter 1176 “perversely allow entities engaged in highly risky cryptocurrency and digital assets activities to enter the banking system under lightly regulated national charters rather than the more rigorously regulated traditional bank charter.”
The trade group contended that this licensing structure hands crypto trust banks an unfair competitive edge by letting them market overlapping services without meeting traditional regulatory obligations. Furthermore, the ICBA cautioned that everyday consumers could mistakenly interpret the formal “national bank” designation as a guarantee that their funds are federally insured.
Legal Battle and Industry Pushback
The ICBA is urging the federal court to invalidate the OCC’s March 2026 chartering rule and the 2021 interpretive letter, while seeking an injunction to block any future charter approvals based on those directives. According to details in the ICBA’s legal complaint, the OCC has already approved or conditionally approved at least 21 trust banks, with at least 13 of those entities operating as cryptocurrency enterprises.
The legal challenge drew swift condemnation from digital asset advocates. On Monday, the Crypto Council for Innovation responded to the litigation, stating that the lawsuit represents an attempt to stifle innovation within the evolving financial sector.
Why This Matters
The dispute underscores an escalating jurisdictional battle over how digital asset firms should integrate into the conventional U.S. banking system. By pursuing national trust bank charters, fintech and cryptocurrency firms aim to bypass state-by-state licensing while securing the prestige and fiduciary standing of federal oversight. Conversely, traditional community banks view the OCC’s chartering pathway as regulatory arbitrage that threatens consumer protection and exposes the broader banking sector to unvetted systemic risks. The outcome of the ICBA’s lawsuit against Comptroller Jonathan Gould and the OCC could determine the future threshold of entry for digital asset custody providers nationwide.
Frequently Asked Questions
Why are crypto firms like Rain and Modern Treasury seeking OCC trust charters?
Companies are pursuing national trust bank charters so they can provide fiduciary digital asset custody and fiat services under direct federal oversight, meeting institutional client demands for a regulated environment.
What is the basis of the ICBA’s lawsuit against the OCC?
The ICBA alleges that the OCC exceeded its statutory authority by allowing non-depository trust banks to conduct extensive non-fiduciary activities under lighter regulatory burdens than traditional lenders face, while potentially misleading consumers about federal insurance backing.
How many crypto companies have received trust bank approvals from the OCC?
According to the ICBA complaint, the OCC has approved or conditionally approved at least 21 trust banks, of which at least 13 are cryptocurrency companies.
