Blockchain Association backs Custodia Bank Supreme Court bid over Fed master account access

Blockchain Association has filed an amicus brief urging the U.S. Supreme Court to hear Custodia Bank's challenge to the Federal Reserve's denial of a master account, arguing federal law requires Fed payment services to be available to eligible nonmember depository institutions and that regional Reserve Banks should not have broad discretion to refuse access. Custodia, a Wyoming-chartered special purpose depository institution focused on digital assets, applied in 2020 and was denied by the Federal Reserve Bank of Kansas City in 2023. The Tenth Circuit later held the regional Fed bank had discretion to reject the request, and the full court voted 7-3 against rehearing in March, leaving Supreme Court review as Custodia's remaining path. The Kansas City Fed is due to respond to the petition by September 11. The dispute now turns less on whether crypto can access the banking system at all than on how clearly the legal standard is defined. Kraken Financial, another Wyoming-chartered crypto bank, secured a limited or "skinny" master account in March with direct Fedwire access but no interest on reserves, sharpening Custodia's argument that similarly chartered institutions are being treated differently under an undefined standard. Blockchain Association says the Court should clarify the limits of Fed discretion under the Monetary Control Act for any eligible institution, not just crypto firms. That question lands as Circle, Ripple, BitGo, Fidelity Digital Assets, Paxos and other digital-asset companies have won trust or banking approvals through other routes, making the case as much about predictability for future entrants as access for firms already inside the system.

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