Block Applies for a National Trust Bank Focused on Crypto Custody

Block has applied to the US Office of the Comptroller of the Currency to establish Builders Bank & Trust, an uninsured national trust bank focused on custody and fiduciary services for bitcoin, stablecoins and related assets.

The proposed institution would not accept deposits or make loans. That distinction separates it from a conventional commercial bank and from Block’s existing Square Financial Services industrial bank, which supports lending. Builders Bank is designed to place custody activities under a single federal supervisory framework as Block expands its digital-asset business.

If approved, the trust bank would be led by Lee Woolley, Block’s digital-asset strategy head and a former banking executive. It cannot begin operating until the OCC grants the charter. The application therefore signals strategic intent, not regulatory approval.

National trust charters have become increasingly attractive to crypto companies because custody crosses state lines and requires consistent controls over asset segregation, private keys, transaction authorisation and anti-money-laundering obligations. A federal framework can reduce reliance on a patchwork of state permissions, although it also subjects the institution to direct examinations and formal governance requirements.

For Block, the proposal fits a broader effort to integrate bitcoin into its payments ecosystem. Owning regulated custody infrastructure could support services for internal businesses and customers while giving the company more control over security standards and product development. It also concentrates responsibility: a custody failure inside a bank subsidiary would carry regulatory and reputational consequences for the entire group.

The uninsured status requires careful communication. Customers would not receive ordinary federal deposit insurance because Builders Bank would not take deposits. Custodied assets instead depend on legal segregation, operational controls and the terms governing recovery if the institution or a service provider fails.

The application joins a wider charter race involving stablecoin issuers, payment firms and crypto platforms. The OCC must assess capital, management, risk systems, business plans and community or market effects. Approval conditions can materially narrow what an applicant is allowed to do, and processing can take time.

A trust charter does not automatically resolve every legal question around digital assets. Classification, bankruptcy treatment, sanctions screening and the handling of protocol forks can still vary by asset and activity. Builders Bank would need policies for each of those cases, as well as independent audits of key management and operational resilience.

Block must also define the boundary between the bank and its commercial affiliates. Transactions, technology services and customer referrals across the group can create conflicts that require arm’s-length controls. The OCC’s eventual conditions may be as important as the charter itself.

Why it matters

Block is asking regulators to treat crypto custody as bank-grade infrastructure. Approval could strengthen institutional confidence and give the company a national platform for services that sit between payments, stablecoins and bitcoin. It could also raise the compliance baseline for competitors that currently rely on fragmented licensing or third-party custodians.

For customers, the relevant question is not whether the institution has “bank” in its name, but which assets it holds, how they are protected and what recourse exists. For regulators, the case will test how traditional fiduciary standards translate to programmable and bearer-like digital assets.

Sources: Block application announcement · Wall Street Journal · OCC charter information