Blockchain Association Seeks Supreme Court Review of Custodia Bank's Master Account Denial

The Blockchain Association has filed an amicus brief with the US Supreme Court to review the Federal Reserve's denial of a master account to Custodia Bank. The association argues that federal law requires the Fed to make its payment services available to eligible nonmember depository institutions, and regional Reserve Banks should not have broad discretion to refuse.

Custodia, a Wyoming-chartered special purpose depository institution, applied for a master account in 2020 but was rejected by the Federal Reserve Bank of Kansas City in 2023. The Tenth Circuit Court of Appeals later ruled that the regional Fed bank had discretion to deny the request, which Custodia is now appealing.

A master account would allow Custodia to settle payments directly with the central bank and access Fedwire, among other benefits. However, if one similarly chartered crypto bank can get a master account while another cannot, it raises questions about the legitimacy of the Fed's discretion and whether it has any real legal limit.

The Blockchain Association's brief frames the stakes beyond Custodia specifically: allowing the appeals court's ruling to stand would give the Fed effectively unchecked power to exclude any lawful industry from the payment system through administrative discretion rather than a defined legal standard.