Block Applies for National Trust Bank Charter to Custody Bitcoin
Block, the payments company behind Square and Cash App, has submitted an application to the Office of the Comptroller of the Currency (OCC) for a national trust bank charter. The proposed bank, Builders Bank & Trust, would be an uninsured and non-depository institution, focusing on the custody of Bitcoin and other digital assets. This move marks a significant development in the crypto industry, as Block seeks to establish a consistent national framework for its digital asset services.
Background and Context
Block has been operating digital asset services for approximately eight years, holding over 50 state money transmitter and virtual currency licenses. The company has handled around $10.7 billion in Bitcoin transaction volume in 2025 and serves about two million monthly crypto users through Cash App. By obtaining a federal charter, Block aims to support its existing activities on a larger scale, leveraging a consistent national framework.
Builders Bank & Trust would be headquartered in Sioux Falls, South Dakota, with no branches. The proposed bank's leadership team would consist of five directors, all of whom reside outside of South Dakota. Block has requested that the OCC waive the rule requiring at least one director to live within 100 miles of the bank's headquarters. Lee Woolley, Block's digital asset strategy lead and a former executive at Northern Trust and BNY Mellon, would chair the bank and serve as its chief executive.
Stablecoin Settlement and Bitcoin Focus
Block's application highlights its focus on Bitcoin and other digital assets, with a notable exception: stablecoin settlement. While the company has expressed reservations about stablecoins in the past, the proposed bank would engage in stablecoin settlement as part of its business operations. This aspect of the application may raise concerns, given the ongoing debate surrounding stablecoins and their potential impact on the crypto market.
Regulatory Landscape and Previous Approvals
The OCC has conditionally approved five crypto trust charters in the past year, covering prominent companies such as Circle, Ripple, BitGo, Fidelity Digital Assets, and Paxos. Coinbase received preliminary approval in April, and applications from Morgan Stanley, Payoneer, Zerohash, Kraken's Payward, and the Trump-linked World Liberty Financial are currently pending. However, the OCC has also denied applications, including Wise National Trust in July.
In April, the OCC amended its chartering rule to cover "operations of a trust company and activities related thereto" instead of "fiduciary activities." This change has been met with controversy, with Senator Elizabeth Warren arguing that the OCC lacks authority to grant trust charters to firms that do not perform traditional fiduciary work. The industry disputes this reading, and the OCC maintains that the change neither expands nor contracts its authority.
Implications and Next Steps
Block's application for a national trust bank charter has significant implications for the crypto industry. If approved, Builders Bank & Trust would become the sixth crypto trust charter to be granted by the OCC. This development would provide a clear regulatory framework for companies like Block to operate within, potentially leading to increased adoption and growth in the digital asset space.
However, the regulatory landscape remains complex, and the OCC's approval is not guaranteed. The agency will carefully review Block's application, considering factors such as the proposed bank's business plan, capital structure, and compliance with regulatory requirements. As the crypto industry continues to evolve, it is essential to monitor developments in the regulatory sphere, as they will have a profound impact on the future of digital assets.
What to Watch Next
The outcome of Block's application will be closely watched by the crypto community, as it may set a precedent for other companies seeking to establish a national trust bank charter. The OCC's decision will also provide insight into the agency's approach to regulating digital assets and its willingness to adapt to the rapidly evolving crypto landscape.