Blockchain Association Seeks Supreme Court Review of Custodia Bank Account Dispute

The Blockchain Association is urging the U.S. Supreme Court to hear Custodia Bank's challenge to the Federal Reserve's denial of a master account, arguing that federal law does not give the Fed broad discretion to deny payment system access to eligible state-chartered banks.

The association filed an amicus brief backing Custodia's petition and arguing that the case could determine how much authority Reserve Banks have to exclude lawful financial institutions from direct access to the Fed's payment system.

Custodia, a Wyoming-chartered bank, applied for a master account in 2020 but was rejected by the Federal Reserve Bank of Kansas City in 2023. The Tenth Circuit subsequently ruled that the Kansas City Fed had discretion to deny the account, prompting Custodia to seek Supreme Court review.

A master account would allow Custodia to settle payments directly through the Federal Reserve rather than relying on an intermediary bank, but a limited or 'skinny' account is available to Kraken Financial, another Wyoming-chartered crypto institution that secured Fed access in March.