New Bitcoin Custody Bank
Block Applies for Federal OCC Charter to Launch Bitcoin Custody Bank
Anonymous
Key Points
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Lee Woolley has more than two decades of banking and financial-services experience. Before becoming Block’s digital-asset strategy lead, he was president and CEO of the Treasury Department Federal Credit Union and held senior leadership positions at Northern Trust and BNY Mellon.
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Block already operates Square Financial Services, an FDIC-insured industrial bank in Utah that makes loans to sellers and consumers and holds Square savings balances; Builders Bank would serve a separate custody-focused role rather than duplicate those deposit-and-lending functions.
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The OCC issued a final rule effective in April 2026 clarifying that national trust banks may conduct certain non-fiduciary activities, including custody. The change helped resolve longstanding uncertainty over whether a trust-bank charter could support a custody business as its core activity.
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Woolley said Builders Bank would support the “secure custody of assets for Block and its customers” and that Block intends to work with the OCC while pursuing the charter.
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Block’s proposed charter would provide a consistent national framework for custody activities that the company already offers, allowing those operations to scale under federal supervision rather than creating an entirely new business line.
Block, the payments giant behind Square and Cash App, has applied to the Office of the Comptroller of the Currency to establish Builders Bank & Trust, an uninsured national trust bank focused on digital-asset custody Decrypt. If approved, the bank would provide federally supervised custody services for bitcoin and stablecoins—but would not accept deposits or make loans. The move reflects growing momentum among fintech companies to use federal trust-bank charters to legitimize cryptocurrency holdings CryptoRank.
Why Block Needs a Separate Bank Charter
Block already operates Square Financial Services, an FDIC-insured bank in Utah that handles lending and deposits KuCoin. Builders Bank would fill a different role—handling only custody and fiduciary services for digital assets. This separation allows Block to scale its cryptocurrency custody business under federal oversight without mixing it with traditional banking operations like consumer loans or savings accounts.
The proposed structure gives Block a national regulatory framework for custody activities it already offers CryptoRank. Instead of operating across multiple state-by-state licenses, Builders Bank would provide one consistent rulebook—making it easier to expand custody services to institutional clients.
OCC's New Rules Clear the Path
The Office of the Comptroller of the Currency issued a final rule effective in April 2026 that clarified national trust banks can conduct custody services as a core business Decrypt. Before this change, regulators were unclear whether a trust-bank charter could legally support cryptocurrency custody. The new guidance removed that uncertainty and opened the door for companies like Block to apply.
This regulatory shift is significant. Trust banks traditionally focused on managing estates and retirement accounts—not digital assets. The OCC's update signals that federal regulators now view institutional cryptocurrency custody as a legitimate banking function Finance Yahoo.
Lee Woolley Leads Block's Banking Push
Lee Woolley, Block's digital-asset strategy lead, is expected to serve as Builders Bank's president and CEO Encrypted. Woolley brings over two decades of banking experience, including previous roles as president and CEO of the Treasury Department Federal Credit Union and senior positions at Northern Trust and BNY Mellon. His deep regulatory background suggests Block is serious about navigating the OCC approval process.
Woolley stated that Builders Bank would support the "secure custody of assets for Block and its customers" CryptoRank. Block says it intends to work closely with the OCC throughout the application process. Approval is not guaranteed—the OCC will review the bank's governance, capital plans, and risk-management systems.
A Test Case for Crypto Banking Legitimacy
Block's charter application reflects a broader shift in how crypto companies approach regulation. Rather than fighting rules or operating in gray areas, Block is seeking explicit federal oversight Decrypt. Success could set a precedent for other fintech and crypto firms seeking trust-bank charters for custody operations.
The outcome also signals what federal regulators think about cryptocurrency's role in mainstream finance. An approval would reinforce the OCC's position that digital-asset custody belongs in the regulated banking system. A rejection would suggest the regulator sees custody as too risky or novel for national bank status Finance Yahoo.
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