When a customer asks to buy bitcoin, a riskless-principal dealer buys it in the market and sells it on to the customer in matching size, taking a spread or fee but no position. The firm is the counterparty on paper and a pass-through in practice.
Block's proposed trust bank lists "execution of customer buy and sell orders for digital assets on a riskless principal basis" among its activities. The phrase tells you the bank would stand between the customer and the market rather than route the order to an exchange in the customer's name.
The reader's question is always the same: at what price, with what spread, and disclosed where.