Block Files for OCC National Trust Bank Charter: What It Means for Crypto Accounting

Jack Dorsey's Block, Inc. filed an application on 8 September 2026 with the Office of the Comptroller of the Currency to establish an uninsured national trust bank called Builders Bank & Trust, N.A. If the OCC approves it, Builders Bank will offer custody and other fiduciary services covering bitcoin and stablecoins, sitting inside a federal regulatory framework that does not currently govern Block's existing custody activities. For accounting firms, auditors, and CFOs advising digital asset clients, the move is not just a corporate milestone: it redraws the compliance and accounting landscape for any client that would use Builders Bank as a custodian.

What Block Actually Filed and Why It Matters

Block described Builders Bank & Trust as an uninsured national trust bank, a specific charter type the OCC grants to entities that provide trust and fiduciary services but do not take federally insured deposits. That distinction carries significant accounting weight. An uninsured national trust bank operates under the National Bank Act and OCC supervision, which means it must meet capital adequacy standards, maintain robust internal controls, and comply with the OCC's examination regime. It does not, however, carry FDIC deposit insurance, so client assets held there are not protected by that backstop.

Block said the charter would create a federal framework for custody and related activities the company currently offers. Lee Woolley, named as the prospective president and CEO of Builders Bank, pointed to Block's experience in digital assets, its track record with Square Financial Services, and the banking expertise of the assembled team as reasons the entity is "well positioned to support Block's broader vision of economic empowerment."

The scope of the proposed charter

The application covers custody and other fiduciary services, explicitly including bitcoin and stablecoins. That scope matters because fiduciary custody at a nationally chartered bank is subject to OCC guidance on digital asset custody, including the interpretive letters the OCC has issued since 2020 on national banks holding cryptocurrency assets on behalf of customers. Those letters, and any successor guidance applicable to trust banks, govern how assets must be segregated, how keys are managed, and what disclosures must accompany custody relationships.

Where Block fits in the current OCC pipeline

Block's application is one of a growing queue. Since 2025, the OCC has received 40 de novo charter applications from fintech and crypto companies. Of those, 21 have been approved and two denied, a meaningful approval rate that reflects the OCC's increasingly accommodating posture toward the industry under the current administration. Other companies that have pursued or obtained OCC charters in the same cycle include Paxos, BitGo, Ripple, and Circle. For context on how earlier conditional approvals have already begun reshaping compliance expectations, see our earlier analysis of how the OCC's earlier conditional approvals reshaped crypto banking compliance.

Accounting Implications of a Federally Chartered Crypto Custodian

The shift from an unregulated or state-regulated custodian to a nationally chartered trust bank is not cosmetic. It has direct consequences for how digital assets held in custody appear on financial statements, how auditors approach those balances, and what documentation the accounting team must gather.

Custody classification under US GAAP

Under ASC 350-60, the FASB's fair value measurement framework for crypto assets adopted in late 2023 and effective for fiscal years beginning after 15 December 2024, an entity that holds crypto assets must measure them at fair value at each reporting date and recognise gains and losses in net income. The classification question that a federally chartered custodian changes is control: does the client control the asset, or does the custodian? If Builders Bank holds assets in a genuine fiduciary capacity, the client's right to those assets is contractual and the balance should remain on the client's balance sheet, but the nature of the custodian now has audit implications. A nationally chartered trust bank is subject to OCC examination, which gives auditors a recognised regulatory framework against which to test the custodian's controls. That is a materially different comfort level than a custodian operating under a state trust license or no license at all.

What changes for the audit of custody balances

Auditors testing digital asset custody balances currently work from a patchwork of SOC 1 and SOC 2 reports, direct confirmations, and blockchain-based proof of reserves. When a custodian holds a federal charter, auditors can supplement those procedures with reference to OCC examination findings, the bank's required regulatory capital, and its published call report data. That does not eliminate the need for direct confirmation or on-chain verification, but it provides an additional layer of third-party oversight that can reduce the extent of other audit procedures. Firms that have clients planning to use Builders Bank, if approved, should update their custody audit programs now rather than waiting for year-end.

Fair value inputs and stablecoin custody

Stablecoins add a further layer. The accounting treatment of stablecoins held in custody depends on whether they qualify as financial assets under ASC 310 or fall under the crypto asset framework of ASC 350-60. The FASB has not yet issued final guidance specifically addressing stablecoins, and the interplay with the federal stablecoin legislation currently moving through Congress adds further uncertainty. A federally chartered custodian holding stablecoins will be subject to whatever reserve and redemption requirements the OCC imposes, which directly affects the fair value assessment of those instruments. Accounting teams should monitor OCC conditions attached to any Builders Bank approval for clues about how the regulator intends to treat stablecoin reserves.

AML and KYC Obligations: The Compliance Uplift

National trust banks are Bank Secrecy Act-covered financial institutions. That means Builders Bank, if chartered, will be required to maintain a full anti-money laundering program, file Suspicious Activity Reports, and comply with FinCEN's Customer Due Diligence rule. Clients of Builders Bank will be subject to that CDD process, which is generally more rigorous than what many crypto-native custodians currently impose.

What this means for your clients' AML documentation

Accounting firms and compliance officers advising clients who plan to custody assets at Builders Bank should expect those clients to face enhanced onboarding requirements, ongoing transaction monitoring, and potentially enhanced due diligence if their transaction profiles involve jurisdictions or counterparties flagged by FinCEN. This mirrors the dynamic we covered in detail when reviewing AML control frameworks for high-volume stablecoin flows: the quality of a custodian's AML program is no longer a peripheral concern; it directly affects whether a client's transaction history will survive regulatory scrutiny.

The broader OCC pipeline and systemic risk considerations

The fact that the OCC has approved 21 de novo charters since 2025 means the sector is no longer dealing with a handful of isolated cases. A systemic concentration of digital asset custody inside nationally chartered banks creates a new dimension of interconnected risk. CFOs and risk officers at firms with multiple digital asset clients should consider whether their aggregate exposure to OCC-chartered custodians is being tracked and disclosed appropriately, particularly in light of concentration risk disclosures required under ASC 825 for financial instruments.

Practical Steps for Accounting Firms and CFOs

The application is pending: no approval has been granted. But the OCC's recent approval rate and the explicit policy direction from the current administration make it reasonable to prepare now rather than react after the fact.

Review custody agreements and chart of accounts

If any client currently uses or plans to use Block's custody products, pull the custody agreement and check whether a change of custodian entity, from an existing Block subsidiary to Builders Bank & Trust, N.A., would constitute a novation or material modification requiring disclosure. Update the chart of accounts to distinguish assets held at nationally chartered custodians from those held elsewhere, as this distinction will become relevant for audit procedures and potentially for regulatory reporting.

Update digital asset accounting software configurations

Any digital asset accounting software or crypto bookkeeping software your practice uses to reconcile client wallets and custody balances will need to be configured to tag Builders Bank as a regulated custodian once it is chartered. That tagging feeds into the audit trail and into any automated fair value feeds, so leaving it miscategorised creates reconciliation risk at year-end. This is also a good moment to confirm that your digital asset accounting software can handle stablecoin positions separately from other crypto assets, given the evolving FASB and legislative treatment of those instruments.

Engage clients on the transition timeline

OCC charter approvals, even when conditions are met, take time. The conditional approval process typically involves a period during which the applicant must satisfy capital, governance, and operational requirements before full approval is granted. Accounting teams should ask Block directly, or monitor OCC public filings, for the conditional approval letter when it is issued. That letter will specify what Builders Bank must do before it can begin operations, and those conditions will determine the realistic timeline for any client transition.

Frequently Asked Questions

What is an uninsured national trust bank and how does it differ from a regular bank?

An uninsured national trust bank holds a charter from the OCC and is subject to federal bank supervision, but it does not accept FDIC-insured deposits. It is authorised to provide trust and fiduciary services, including asset custody. Client assets are not protected by deposit insurance, so counterparty risk assessment remains essential even though the entity is federally regulated.

How should auditors treat digital assets held at a federally chartered custodian?

The asset remains on the client's balance sheet if the client retains control under the custody agreement. However, the existence of an OCC charter means auditors can reference the custodian's regulatory capital requirements and examination history as supplementary evidence of control environment quality. This does not replace direct confirmation or on-chain verification but can inform the nature and extent of other procedures.

Does the Builders Bank application change anything for stablecoin accounting today?

Not yet: the application is pending. But firms should track OCC conditions once a conditional approval is issued, as those conditions may specify how stablecoin reserves must be held and disclosed. That information will directly affect the fair value assessment and balance sheet classification of stablecoins custodied at Builders Bank.

What AML obligations will Builders Bank have as a national trust bank?

As a Bank Secrecy Act-covered financial institution, Builders Bank will be required to implement a full AML compliance program, conduct customer due diligence under FinCEN's CDD rule, file Suspicious Activity Reports, and submit to OCC examination of those programs. Clients will face more rigorous onboarding and ongoing monitoring than is typical with unregulated custodians.

How many OCC de novo crypto charters have been approved since 2025?

The OCC has received 40 de novo charter applications since 2025 from fintech and crypto companies. Of those, 21 have been approved and two denied as of the date of this article. Block's Builders Bank application joins that queue and has not yet received a decision.

Source: The Block