Block Submits Application to Establish National Trust Bank for Custody Services
Block Inc., the parent company of Square and Cash App, has submitted an application to establish a national trust bank called Builders Bank & Trust. The move aims to streamline its operations in Bitcoin custody services by obtaining a single federal charter regulated by the Office of the Comptroller of the Currency (OCC). This would allow Block to manage digital assets more efficiently without relying on third-party custodians, reducing costs and regulatory complexity. Block's current cryptocurrency business generates significant transaction volume but remains low-margin due to accounting rules that require booking full Bitcoin transactions as revenue while retaining only a small portion. The company’s Cash App users are active in buying and selling Bitcoin, contributing nearly $1.9 billion in crypto-related revenue during the most recent quarter. The proposed trust bank is expected to support Block's long-term strategy of expanding its digital asset offerings but does not immediately address profitability concerns around its current low-margin model.
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Topics: bitcoin custody block builders bank & trust regulatory filings