Blockchain Association Backs Custodia Bank in Supreme Court Fed Account Battle

The Blockchain Association has filed an amicus brief in support of Custodia Bank's Supreme Court petition, which challenges the Federal Reserve's denial of a master account. In 2020, Custodia Bank applied for a Federal Reserve master account, but was formally rejected by the Kansas City Fed due to 'undue risk' and its crypto-focused operations being seen as a threat to financial stability.

Custodia argues that the Fed is required by law to provide master accounts to any legally eligible depository institution. Lower courts have sided with the Fed so far, ruling that regional reserve banks do not have a say in the matter.

The Blockchain Association and other crypto advocates are supporting Custodia as a way to set a precedent for future rulings. They argue that unchecked federal power will deny crypto service providers foundational banking services.