- Key insight: Block is applying for a new charter to offer crypto custody services after working with digital assets for years.
- What's at stake: Fintechs are increasingly looking to own the bank regulation relationship directly instead of connecting to sponsor banks.
- Expert quote: "Block has not signaled tokenization plans and its stated digital asset focus remains bitcoin, with stablecoins adopted more reluctantly on customer demand." —KBCM analysts
Block CEO Jack Dorsey, who has been
Block announced after market close on Tuesday that it has submitted an application to the Office of the Comptroller of the Currency to establish a national trust bank called Builders Bank and Trust. The charter would be separate from the company's
The charter application is the latest in a
Pending approval from regulators, Builders Bank and Trust would provide custody and related fiduciary services for digital assets such as bitcoin and stablecoins. According to a company statement, Builders would be an uninsured national trust bank and would not accept deposits or make loans.
"Block already self-custodies bitcoin in most cases, so the charter is likely primarily about federal preemption supporting better scale [with] growth at federal reg level vs. state-level patchwork," Keybanc Capital Markets, or KBCM, analysts said in a research note. "Within the recent wave of digital asset trust applicants, Block stands out as a mass-consumer app with added distribution via its Square merchant base. The charter adds optionality across stablecoin settlement and other digital asset activities."
Dorsey has previously expressed
The company did not indicate that tokenized deposits are part of its proposed business plan, even as other digital-asset focused firms and banks are
"A national trust charter is a broad federal custody/fiduciary license," KBCM analysts said. "The same entity could extend into tokenized-asset custody and settlement. We frame this as longer-dated optionality: Block has not signaled tokenization plans, and its stated digital asset focus remains bitcoin, with stablecoins adopted more reluctantly on customer demand."
The application has not yet been posted for public comment by the OCC; the agency did not immediately respond to a request for comment.
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"Building on Block's experience in the digital asset space, our history with Square Financial Services and the deep banking expertise of the team we've assembled, we believe Builders Bank is well positioned to support Block's broader vision of economic empowerment," Lee Woolley, who would serve as president and CEO of Builders Bank, said in a statement. "We look forward to working with the OCC as we pursue a charter designed to support the secure custody of assets for Block and its customers."
Woolley currently works as Block's digital asset strategy lead and previously served as president and CEO of Treasury Department Federal Credit Union. He has also held senior banking leadership roles at Northern Trust and BNY Mellon, according to a company statement.
The application is subject to review and approval by the OCC, which has publicly advertised that it aims to turn around charter applications
