- Block, the payments company founded by Jack Dorsey, has applied for a US national trust bank charter for a new entity called Builders Bank, according to Decrypt.
- A charter of that type covers custody and fiduciary work only. It carries no power to take deposits or make loans, and no FDIC insurance.
- Block currently runs this work under more than 50 state money transmitter licences. The application is under review, not approved.
Block wants to be a bank, up to a point. The company behind Square and Cash App has applied to the US regulator that charters national banks, for a licence covering one narrow job: holding bitcoin on behalf of other people. No deposits, no lending, no current accounts.
“Bank” is the most reassuring word in finance, and it is doing very little work here. A national trust charter would put Block’s custody business under one federal supervisor with proper examination powers, which is a real upgrade on fifty-odd state regimes. It would not make the coins held in that custody insured, guaranteed or replaceable if something went wrong.
For a UK reader the gap is wider again. A US trust charter brings no FSCS cover, no Financial Ombudsman and no route to UK redress, because none of those things follow an American licence across the Atlantic. “Federally supervised custody” describes who inspects the custodian. It says nothing about whether your money comes back.
What a national trust charter allows
National trust banks are chartered by the Office of the Comptroller of the Currency, the federal regulator that supervises national banks in the United States. A trust charter grants fiduciary powers: holding and administering assets for clients, acting as custodian, keeping those assets separate from the firm’s own balance sheet.
What it withholds is the part most people picture. A trust bank cannot take insured deposits and it cannot lend against them. Because there are no insured deposits, there is no FDIC cover, which is the protection that gives an ordinary American bank account its floor of $250,000. The charter is a supervision framework for looking after other people’s assets, not a promise about what happens if they disappear.
Block is not new to bank regulation. It already owns Square Financial Services, a Utah industrial bank set up for small business lending, and it sells the Bitkey hardware wallet for people who would rather hold their own keys. Custody sits between those two businesses: institutional and consumer clients who want somebody else to carry the operational burden.
Why fifty-plus licences are worth escaping
Money transmitter licensing in the US is done state by state. Each state sets its own capital and bonding requirements, its own reporting, its own examination cycle, its own renewal paperwork. A firm operating nationally ends up maintaining dozens of parallel compliance relationships to do a single thing, and any change to the product has to clear all of them.
One federal charter replaces that with one supervisor. There is a commercial payoff beyond the reduced headcount, too. Plenty of institutional mandates specify a bank or trust company as custodian, and a state money transmitter licence does not satisfy that language. A federally chartered trust bank does.
Anchorage got there first, and it took a while
The template exists. Anchorage Digital received a national trust charter from the OCC in January 2021 and remains the reference point every subsequent applicant is measured against. Several crypto firms have filed for the same kind of charter since the start of 2025, and the OCC does not publish a timetable for deciding them. Applications of this size have historically taken many months.
The regulatory backdrop is moving at the same time. The Defiant reports that the SEC’s proposed rewrite of custody rules for investment advisers and investment companies entered White House review on 25 August, after the agency withdrew a separate 2023 safeguarding proposal. Who is allowed to hold crypto for professional investors, and on what terms, is being redrawn on two tracks at once.
What we cannot confirm
We could not locate the application itself, or a public statement from Block describing what Builders Bank would and would not do. The detail in this piece about the charter’s scope comes from Decrypt’s write-up rather than from a primary filing we have read, so treat the specifics of Builders Bank’s remit as reported rather than established.
The filing also leaves an obvious question unanswered, at least publicly. If the charter is granted, it is not clear whether Block would surrender its state money transmitter licences, keep them running alongside, or migrate customers gradually. If it is refused, the existing arrangement presumably continues as it is. Neither outcome has been spelled out.
What to watch
The OCC’s weekly bulletin, where applications and decisions are listed, is where this becomes news again. Watch also for Block saying anything concrete about the state licences, because that is the difference between a genuine consolidation and an extra entity bolted onto the existing structure.
And if you are a UK holder weighing a regulated custodian against holding your own keys, the charter should not change that calculation much. The protections that matter to you are the ones attached to where you live, not to your custodian’s American paperwork. Our guide to self-custody sets out the trade-off either way.