Blockchain Association Backs Custodia in Supreme Court Fed Access Battle

The Blockchain Association has filed an amicus brief in support of Custodia Bank's Supreme Court petition to challenge the Federal Reserve's denial of its application for a master account. This would grant Custodia direct access to the Fed's payment system, which it claims is required by federal law.

Custodia, a Wyoming-chartered bank focused on digital assets, applied for the 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 reject its request.

The Blockchain Association argues that this decision effectively gives the Fed veto power over state-chartered banks, allowing it to withhold services needed for independent operation. They also link Custodia's case to alleged crypto debanking under 'Operation Choke Point 2.0,' where federal regulators discouraged banks from serving the digital asset industry.

The trend of crypto companies gaining access to US banking has drawn resistance from traditional banking groups. In contrast, other crypto firms such as Kraken Financial and Coinbase have received approval for limited-purpose master accounts and national trust company charters, respectively.