Policy · Analysis
Block Wants a Bank That Takes No Deposits and Makes No Loans
Jack Dorsey's payments company filed on Tuesday to charter Builders Bank & Trust, an uninsured national trust bank built to hold bitcoin and stablecoins for customers. It is the fortieth de novo application the OCC has taken since 2025 — a volume the agency previously spread across fourteen years.
Block filed an application with the Office of the Comptroller of the Currency on Tuesday to establish Builders Bank & Trust, N.A. The word doing the most work in that sentence is the one nobody will question.
Builders Bank would be an uninsured national trust bank. It would not accept deposits. It would not make loans. Strip those two functions out and what remains is not a bank in the sense most readers hold the word — it is a custodian with a federal charter, holding bitcoin and stablecoins on behalf of customers and providing fiduciary services around them. There is no FDIC insurance because there are no deposits to insure.
That structure is not a loophole and it is not new. National trust banks have existed for a long time and they do exactly this: hold other people's assets, exercise fiduciary duties, submit to OCC examination. What is new is how many crypto companies now want one, and how quickly.
Forty applications, twenty-one approvals, two denials
Per The Block, the OCC has received 40 de novo charter applications since 2025. It has approved 21 and denied 2. The arithmetic on the remainder is straightforward and worth stating out loud: roughly seventeen applications are somewhere in the pipeline, and Block's is now among them.
The comparison that gives those numbers their shape comes from PYMNTS: the agency took 48 de novo applications across the fourteen years from 2011 to 2024. It has taken 40 in about eighteen months.
De novo charter applications to the OCC, annualized
A roughly eightfold jump in the rate at which companies ask to become federally chartered institutions is the story underneath Block's filing. Block is not leading this; it is joining it. Companies that have already secured conditional approval include Revolut, Coinbase, Paxos, BitGo, Ripple, Circle and World Liberty Financial.
Conditional approval is not a bank
That list of conditional approvals deserves a caveat this desk has made before, because the industry keeps collapsing two very different milestones into one headline.
Preliminary conditional approval means the OCC has decided the applicant may proceed toward opening, subject to conditions. Those conditions are frequently the entire substance of the decision — capital minimums, leverage ratios, operating restrictions, deadlines. A company can hold a conditional approval and never open a bank, and the gap between the press release and the doors opening can be measured in years and hundreds of millions of dollars.
Block itself is careful on this point. The company says Builders Bank would not commence operations until it receives the required regulatory approvals. That is the correct framing, and it will be worth remembering when the coverage of the eventual approval arrives.
Block already runs a bank
The detail that makes this filing more interesting than a straightforward land grab is that Block is not new to bank supervision. It operates Square Financial Services, an industrial bank, and Lee Woolley — currently the company's digital asset strategy lead, and the proposed president and chief executive of Builders Bank — arrives with a conventional banking résumé rather than a crypto one. Per PYMNTS, he previously served as president and chief executive of the Treasury Department Federal Credit Union and held senior roles at Northern Trust and BNY Mellon.
Woolley's statement on the filing is the only substantive quote the company has offered: "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."
Read past the corporate register and there is an argument in there. Block's position is that it is already doing custody, already supervised in another form, and would like the activity it performs today to sit inside a single national framework rather than a patchwork. That is the same argument Coinbase, Ripple, Circle and Paxos have made, and it is a reasonable one. State-by-state money transmission licensing is genuinely expensive, genuinely slow, and genuinely produces inconsistent obligations for identical conduct.
What a charter would actually change
For a customer, the practical difference is narrower than the word "bank" implies, and it is worth being precise about it rather than letting the charter carry an unearned promise.
An OCC-chartered trust bank is examined by a federal prudential regulator. Its custody arrangements, capital, governance and risk controls are subject to supervision and periodic examination rather than to a company's own attestations. In the event of the institution's failure, assets held in a fiduciary capacity are generally not available to the institution's creditors — a genuinely meaningful protection, and a different one from deposit insurance.
What it does not do is insure anything. There is no federal backstop on the value of a bitcoin held at a trust bank, and no FDIC coverage on a customer's balance, because coverage attaches to insured deposits and there are none here. If Builders Bank opens and holds a customer's bitcoin, and bitcoin falls by half, the charter is irrelevant. If the bank is hacked, the charter is not insurance. It is supervision — which is worth having, and is not the same thing.
The Take
The interesting number in this story is not 40 applications; it is 2 denials. An agency that has approved 21 and denied 2 out of 40 is either seeing an unusually well-prepared applicant pool or applying a filter set to let things through, and from the outside those two possibilities look identical. That is not an accusation — a de novo charter application is expensive enough that unserious filings are rare, and the OCC's conditions do real work after approval, as the $210 million capital bar attached to OpenReserve showed. But the industry is now assembling a tier of federally chartered custodians at a pace the agency has no modern precedent for, and the supervisory capacity to examine them has to come from the same budget as everything else the OCC does. Block is a reasonable applicant with an actual banking track record and an executive who has run a regulated institution before; if anyone should get one of these, it is probably a company already living under bank supervision. The question worth holding is not whether Builders Bank should be chartered. It is whether an agency that spent fourteen years reviewing 48 applications can examine 21 new institutions with the same rigour it used to grant them.