Key Highlights:
- Firms like Rain and Modern Treasury are actively pursuing national trust bank charters to offer digital asset custody and fiduciary backing under federal oversight.
- The Independent Community Bankers of America (ICBA) has filed a lawsuit against the OCC and Comptroller Jonathan Gould, arguing the agency exceeded its authority by granting light-touch charters to crypto firms.
- According to the ICBA legal complaint, the OCC has granted full or conditional approval to at least 21 trust banks, with digital asset firms accounting for at least 13 of those approvals.
Crypto and Payments Firms Seek Federal Oversight via National Trust Charters
Financial technology and digital asset platforms are increasingly turning to federal trust frameworks to secure institutional credibility and institutional-grade protections. Rain is among the latest entrants seeking a national trust bank charter to support its institutional clients. Underscoring the institutional demand driving this trend, “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.
Rain is not alone in this strategy. The organization joins an expanding roster of payments and cryptocurrency enterprises looking to formalize their operations within the federal banking perimeter. In a parallel move, payments infrastructure company Modern Treasury announced on Monday that it had submitted an application seeking regulatory approval to deliver digital asset custody solutions along with associated fiat currency services.
Community Banks Mount Legal Challenge Against the OCC
This steady migration of digital asset entities toward national trust status has triggered fierce institutional pushback from traditional finance. On Friday, the Independent Community Bankers of America filed a lawsuit in the US District Court for the District of Columbia against the Office of the Comptroller of the Currency (OCC) and Comptroller Jonathan Gould. The trade group contends that the regulator exceeded its statutory authority by permitting non-depository trust banks to execute broad non-fiduciary operations.
In its formal legal complaint, the ICBA specifically challenged the OCC’s regulatory foundation, arguing that the agency’s National Bank Chartering final rule and interpretive letter 1176, issued in 2021, “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 ICBA further argued that this federal framework provides crypto-focused trust institutions with an unfair competitive edge. By offering banking-adjacent services that mirror those of community lenders without bearing standard regulatory mandates, the ICBA claims these institutions introduce systemic friction. Additionally, the trade group raised consumer protection concerns, stating that customers could easily confuse a “national bank”
designation as a formal guarantee that their deposited funds are backed by federal deposit insurance.
Consequently, the ICBA has petitioned the court to strike down the OCC’s March 2026 chartering rule alongside the 2021 interpretive letter, while seeking an injunction to block any future trust charter approvals rooted in those administrative policies. The legal action prompted swift criticism from digital asset advocates; on Monday, the Crypto Council for Innovation remarked that the ICBA lawsuit represents an attempt to stifle innovation.
Why This Matters
The outcome of the ICBA’s litigation against Comptroller Jonathan Gould and the OCC could fundamentally reshape the pathway digital asset firms use to access federal banking infrastructure. Based on the figures disclosed in the ICBA’s filing, the OCC has already approved or conditionally approved at least 21 trust banks, with digital currency firms making up at least 13 of those approvals. If the federal court invalidates the OCC’s interpretive guidance or restricts trust charters to purely traditional fiduciary roles, upcoming applicants such as Modern Treasury and Rain could face substantial regulatory delays or be forced to pursue full-service commercial banking charters, which carry significantly heavier capital and compliance requirements.
Frequently Asked Questions
Why are cryptocurrency and fintech platforms applying for national trust bank charters?
Companies like Rain and Modern Treasury are seeking national trust bank charters so that institutional assets can be managed by a fiduciary that is supervised by a federal regulator, enabling them to provide digital asset custody and fiat services under a unified national standard.
What are the primary claims in the ICBA’s lawsuit against the OCC?
The Independent Community Bankers of America argues that the OCC exceeded its legal mandate by enabling crypto entities to operate non-depository trust banks under less stringent rules than conventional banks. The group claims this grants crypto firms an unfair market advantage and risks confusing consumers who may assume their assets carry federal insurance.
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, with crypto businesses accounting for at least 13 of those entities.
