Blockchain Association Backs Custodia in Supreme Court Fight Over Master Account

The Blockchain Association has filed an amicus brief in support of Custodia Bank's challenge to the Federal Reserve's denial of a master account. The association argues that federal law requires the Fed to provide payment services to eligible nonmember banks, giving them direct access to the Fed's payment system.

Custodia 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. The association claims this interpretation gives the Fed excessive control over state-chartered banks and links it to claims that regulators discouraged banks from serving crypto companies.

The case comes as other digital asset firms gain deeper access to the US banking system. Kraken Financial received a limited-purpose Fed master account in March, while Coinbase and Circle have secured federal trust approvals. Other companies, including Ripple, BitGo, Fidelity Digital Assets, and Paxos, have conditional approvals.

The association's support of Custodia is seen as a pushback against traditional banking groups that argue crypto firms seek banking privileges without facing the full regulatory framework applied to conventional banks.