Underneath The Hood Of The Rapidly Growing Neobank Sector With Rain CTO Charles Yoo-Naut

Rain was co-founded by Charles Yoo-Naut and his co-founder Frug after meeting in 2021 on a Slack channel for founders. The founding frustration was slow and expensive ACH and wire rails. The pivotal early insight came when Rain received a USDC investment from a Singapore-based investor instantly on Christmas Day, versus a potential five-plus day wait via traditional banking due to holiday and weekend closures. Rain identified the core bottleneck to stablecoin adoption as spendability and interoperability with existing payment rails, and responded by making stablecoins spendable on a Visa card to unlock acceptance at millions of merchants globally.

Early customers were crypto-native teams including DAOs, funds, and protocols, many of whom were offshore and underbanked due to regulation. Rain spent its first two years building on-chain infrastructure, smart contracts, licensing, and Visa membership before shifting in 2024 from being its own customer to becoming a platform enabling others to issue on top of its infrastructure. Rain currently powers over 200 programs and recently announced a partnership with Western Union. The host estimated that leading programs on Rain's platform are doing approximately 100 million dollars a month in volume individually, with others at 80, 60, and 40 million, putting cumulative monthly transaction volume at a quarter billion dollars or more. By contrast, in 2024 Rain was excited to do one million dollars in a single month, and in early 2025 monthly volume was less than approximately 20 million dollars. Rain grew from low single digit millions to hundreds of millions in revenue in approximately 18 months.

When a Rain-powered card is swiped, authorization is checked against on-chain balances rather than a bank account or traditional underwriting. Traditional card settlement is a net batch process, and rails such as Fedwire and ACH only operate during banking hours Monday through Friday, which forces card network issuers to post collateral to cover settlement risk on weekends and holidays. Visa introduced stablecoin settlement in USDC in 2021, and Rain was one of the first issuers to achieve 365-day settlement in USDC including weekends and holidays. Settling every day collapses collateral requirements for Rain, reducing cost of capital and borrowing needs compared to traditional issuers, and those savings can potentially be passed through to end customers.

Stablecoin infrastructure has lowered the cost of launching a neobank compared to traditional bank partnerships that required large monthly minimums and locked programs to the country of the partner bank. Stablecoin-first neobanks can launch in multiple countries on day one. Yoo-Naut described the neobank sector as undergoing a Cambrian explosion and an unbundling phase, moving from super-app generalist models to laser-focused specialized products targeting previously unprofitable consumer segments. Rain's platform is technology-agnostic and can power use cases including freelancers in Latin America, high net worth individuals in Southeast Asia, and remittances into Africa. Yoo-Naut cautioned that there is no single answer for why the world needs a stablecoin-based neobank and that the value proposition must be specific to a target customer segment.

Rain chose to become a B2B infrastructure provider rather than going direct-to-consumer because it concluded it could not be best-in-class across all verticals such as remittance, freelancer markets, Mexico, and Nigeria simultaneously. Revenue sources are interchange fees, SaaS fees charged to customers, and usage fees for card issuance, KYC, dispute handling, and shipping. Rain's long-term goal is to IPO rather than be acquired, and Yoo-Naut predicted an IPO could be ready in another year or two if the business continues on its current trajectory, while noting there is still a lot of work to do.

Rain had only 17 people at the beginning of last year and was built from the start with the assumption that AI agents would handle work that traditionally required large headcounts in fintech, with compliance, support, and implementation workflows redesigned from an AI-first perspective. Yoo-Naut noted that Rain cannot easily be replicated by vibe coding because of the compliance, licensing, legal requirements, and relationships involved. He argued that AI agents will increasingly spend on behalf of humans and will prefer stablecoin rails when available, citing X402 as an example of agents paying for APIs using stablecoin rails, though merchant acceptance remains a current barrier. He also argued that even with stablecoin settlement on both sides of a transaction, a network like Visa still provides value through consumer protections such as dispute resolution that wallet-to-wallet stablecoin payments lack. The ideal stablecoin upgrade to settlement infrastructure would be invisible to end users, similar to switching cloud providers, and Rain plans to experiment with payment experiences that are not card-based.