Block Seeks Federal Charter to Hold Its Own Bitcoin

Block, the fintech company founded by Jack Dorsey, has filed an application with the Office of the Comptroller of the Currency (OCC) to launch a federally chartered trust bank called Builders Bank & Trust. This move aims to simplify Block's current state-by-state approach to holding Cash App and Square customers' bitcoin and stablecoins.

The new bank would not engage in lending or taking deposits, but instead focus on providing institutional-grade fiduciary custody and safekeeping of digital assets. This change is driven by the complexity and overhead of navigating over 50 state money transmitter and virtual currency licenses, which Block has been subject to for nearly eight years.

The OCC's Interpretive Letter No. 1192, published on June 9, clarified that a national trust charter can preempt state money transmitter licensing requirements entirely. This development has led to an influx of applications from fintech and crypto companies seeking federal charters, including Circle, Ripple, Paxos, BitGo, Fidelity Digital Assets, and others.

Block's move is significant as it seeks to become its own bank for crypto custody, rather than relying on partnerships with legacy banks. This approach would allow Block to control custody, pricing, and product roadmap without needing to negotiate terms with an outside bank each time it wants to add a feature.