Court Denies Custodia Bank Appeal Over Federal Reserve Master Account Access
The Tenth Circuit’s ruling leaves Custodia without a Fed master account, though TD Cowen suggests alternative limited access as other crypto firms seek national trust bank licenses.
Fact Check
The evidence provided strongly and consistently supports the statement. A primary news report from Bloomberg Law, a highly authoritative source on legal matters, directly states that a US court denied Custodia Bank's appeal concerning its master account application. The article specifies that the court affirmed the Federal Reserve Bank of Kansas City's authority to reject the application. This is corroborated by a secondary analysis from the law firm Steptoe & Johnson, which, while discussing a different proposal, uses the denial of Custodia's master account as an established fact and contextual background. There are no contradictions between the sources. The direct, factual reporting from a reputable legal news outlet makes the statement highly credible.
Summary
The U.S. Tenth Circuit Court of Appeals upheld Custodia Bank’s lack of authority to compel the Federal Reserve to provide a master account, affirming the central bank’s discretion. TD Cowen described the decision as a “speed bump,” suggesting Custodia might still pursue a slimmed-down account. Meanwhile, major crypto firms including Coinbase, Ripple, and Circle are seeking national trust bank licenses, signaling ongoing efforts by industry players to secure direct banking capabilities.
Terms & Concepts
- Federal Reserve master account: A primary account at the U.S. central bank that allows direct access to payment and settlement systems.
- National trust bank license: A federally regulated banking charter allowing institutions to operate under national oversight, often sought by crypto companies for broader banking capabilities.