Blockchain Group Backs Custodia in Fed Account Fight

The Blockchain Association has filed an amicus brief in support of Custodia Bank's petition to the U.S. Supreme Court, arguing that federal law does not give the Federal Reserve broad discretion to deny payment system access to eligible state-chartered banks.

Custodia applied for a master account in 2020 but was rejected by the Federal Reserve Bank of Kansas City in 2023. The Tenth Circuit ruled 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.

The Blockchain Association argues that Custodia's case extends beyond crypto and could determine how much authority Reserve Banks have to exclude lawful financial institutions from direct access to the Fed's payment system.