Block (NYSE: XYZ), the fintech company led by Jack Dorsey, applied to the U.S. Office of the Comptroller of the Currency (OCC) on September 8 for a national trust bank charter.
The proposed institution, Builders Bank & Trust, N.A., would operate as an uninsured, non-depository trust bank focused on custody and fiduciary services for Bitcoin, stablecoins and other digital assets.
Sponsored
The application does not seek permission for the bank to accept consumer deposits or make commercial loans. Lee Woolley, Block’s Digital Asset Strategy Lead and a former bank executive, has been named president and CEO. The application remains pending, and Builders Bank would begin operations only if the OCC grants approval.
Why Block Wants a National Trust Charter
A national trust charter would give Block a federally regulated structure for its digital-asset custody business, replacing its reliance on separate state-by-state licensing and third-party banking infrastructure.
For activities covered by the charter, federal preemption could allow the bank to operate under OCC supervision rather than maintaining separate regulatory relationships across individual states.
For a company operating at Block’s scale, consolidating that oversight could simplify compliance and reduce the operational burden associated with managing a 50-state regulatory system.
Block’s “Rent vs. Own” Strategy
For more than a decade, fintech companies including Cash App have relied heavily on partner banks for banking infrastructure. Those arrangements typically involve fees tied to accounts and transactions, meaning costs can rise as the customer base grows.
Block’s proposed trust bank would allow the company to bring key digital-asset infrastructure in-house.
Builders Bank would not take deposits or make loans. Instead, its activities would be limited to custody, fiduciary and administrative services for Bitcoin, stablecoins and other digital assets.
That structure would allow Block to avoid the costs and risks associated with traditional deposit-taking and lending, including FDIC deposit insurance, conventional bank capital requirements, credit exposure and bank-run risk. The business would instead generate revenue primarily through fiduciary and custody fees.
Digital assets held by the bank would not be covered by federal deposit insurance.
Why Fintechs Are Moving Away From Partner Banks
Block’s charter application reflects a broader shift across fintech and digital assets. Instead of relying entirely on third-party banks, financial technology companies are increasingly seeking direct federal oversight of critical financial infrastructure.
The strategy has gained attention following the failures of banking partners such as Synapse and Silicon Valley Bank, which disrupted businesses that depended on them.
A federally regulated structure could reduce Block’s exposure to those third-party dependencies and give the company greater control over its digital-asset custody operations.
And Block is not alone here. Circle received final OCC approval for a national trust charter in July, while Ripple, BitGo and Paxos have received conditional approvals in the same broader regulatory pipeline.
What It Means for Block and Jack Dorsey
Obtaining a national trust charter is a lengthy, costly and closely supervised process, and Block’s application is not guaranteed to receive approval.
If it succeeds, however, the move could give Block a structural advantage over smaller fintech competitors that remain dependent on partner banks and state-by-state licensing.
For Jack Dorsey and Block, the strategy goes beyond obtaining a banking charter. It is an attempt to bring critical digital-asset infrastructure in-house, reduce reliance on third-party banks and potentially lower costs for users.
For retail investors and everyday crypto users, that could ultimately mean stronger asset protection, less exposure to banking intermediaries, lower fees and faster transactions.
Explore DailyCoin’s top crypto news right now:
Zcash Price Surges 2,496% as Privacy Becomes the Trade of the Year
Cardano Bulls Brace Themselves For a Bounce To $0.50