Jack Dorsey's payment company Block applies to the OCC for a national trust bank to custody Bitcoin
Jack Dorsey's payment company Block has applied to the U.S. Office of the Comptroller of the Currency (OCC) to establish Builders Bank & Trust, a non-depository national trust bank, for the custody of Bitcoin, stablecoins, and other digital assets.
The bank will not accept deposits or issue loans, focusing on custody and trust services, executing customer buy and sell orders on a risk-free principal basis, and stablecoin settlements. It plans to be headquartered in Sioux Falls, South Dakota, with no branches.
The proposed chairman and CEO is Lee Woolley, Block's head of digital asset strategy, who previously worked at Northern Trust and BNY Mellon. The five proposed directors do not reside near the headquarters, and the company has requested a waiver of the requirement for one director to live within 100 miles.
Block has been operating its digital asset business under approximately 50 state-level money transmission and virtual currency licenses for about eight years, with Bitcoin transaction volumes projected at approximately $10.7 billion in 2025. As of the second quarter, Cash App had about 2 million monthly active crypto users. The company states that the federal license is intended to bring existing custody activities under a unified regulatory framework.
Similar applications have become a trend: Coinbase, Paxos, BitGo, Ripple, Circle, and others are also pursuing national trust or conversion paths, with Revolut receiving conditional approval last week. National trust banks can provide custody, settlement, trust, and reserve management, but cannot engage in traditional deposit-taking and lending.
Mechanically, this is a license-driven pathway to centralization: state-level puzzles are replaced by a single federal regulation, making it easier for institutional clients to accept counterparty identities; custody and settlement fees are concentrated among licensed trusts, putting pressure on state-licensed platforms that do not have a federal framework. Funds will not instantly relocate due to the application, but incremental custody is more likely to flow to entities that can answer "who is regulating you."
The application is still pending OCC approval, and the bank cannot open until approved. The existing licensed experience of Square Financial Services is used as supporting narrative, but this entity explicitly excludes deposit-taking and deposit insurance.
Source: Public information
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Block has integrated Bitcoin into Cash App for many years, focusing on retail payment entry rather than institutional custody branding. Dorsey's approach has consistently emphasized Bitcoin as a payment and self-custody tool, but as it scaled, the more than 50 state licenses became an expansion friction. The application for a trust bank is an upgrade of the same Bitcoin flow from money transmission licenses to a federal custody identity, rather than suddenly becoming a commercial bank.
Capital is directed towards licenses, trust governance, and custody systems, rather than new lending balance sheets. Woolley, coming from traditional custodial banks, aims to bring the trustee language from Northern Trust and BNY Mellon to the retail currency of Cash App. The motivation is to answer who federal regulators are after scaling; the strategy is to first secure custody and stablecoin settlements, then decide whether to engage in deposits.
Similar paths are seen with Circle, Paxos, and BitGo moving issuance or custody into national trusts, as well as Anchorage serving as a long-standing example of a crypto-native trust bank. The industry phase is transitioning from state-level license expansion into federal framework control: whoever first obtains OCC status can consolidate counterparty reviews from 50 states into a single window.
This represents a capital concentration driven by regulatory changes: custody pricing power shifts from state-level compliance costs to the scarcity of federal licenses. The mechanism is that trust banks cannot accept deposits but can become recognized custodians of assets for institutions, thus the existing Bitcoin and stablecoin holdings begin to be re-ranked according to regulatory hierarchy.
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When the retail entry grows, it needs to acquire a custody identity.
Not accepting deposits or loans can still consolidate regulation into a single window.
The license race competes on whether counterparties dare to entrust their coins to you.