Two payments infrastructure companies, Modern Treasury and Rain, filed applications on 5 October to set up limited-purpose national trust banks. Modern Treasury wants to add supervised digital asset custody, without lending and without issuing a stablecoin. Rain is aiming at custody, reserve management and stablecoin issuance for institutional clients. Both filings are still under review by the federal banking regulator.

What it means: The applications by Modern Treasury and Rain for limited-purpose national trust charters show payments infrastructure firms no longer wanting to rely entirely on partner banks, and instead wanting to control more of the chain, especially digital asset custody and, in Rain's case, stablecoin issuance for institutional clients. A charter of this kind does not allow lending, but it places the company under direct federal supervision, which can raise the confidence of large clients who require regulated counterparties before entrusting their funds. It is another sign that stablecoins are moving from the fringe into the supervised banking system, a trend that in Europe takes shape through MiCA and the licences it sets out for issuers and providers. The applications are still under review, so nothing is guaranteed, but fintechs now choosing to seek banking supervision rather than avoid it shows how much the climate for digital currencies has changed.

Read the original on The Financial Current

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