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Blockchain Association urges Supreme Court to back Custodia Fed access bid
The filing argues the Fed should not be able to effectively veto eligible state-chartered banks by withholding master accounts needed for direct payment system access.
The Blockchain Association has urged the US Supreme Court to take up Custodia Bank’s challenge to the Federal Reserve’s refusal to grant the Wyoming-chartered crypto-focused bank a master account, which would provide direct access to the Fed’s payment system, according to an amicus brief filed Wednesday.
The group says federal law requires the Fed to make its payment services available to eligible nonmember banks and that the appeals court ruling gave the central bank overly broad discretion. It also argued the decision effectively gives the Fed a veto over state-chartered banks by allowing it to withhold the services they need to operate independently.
The association linked Custodia’s case to alleged “Operation Choke Point 2.0,” saying federal regulators discouraged banks from serving the digital asset industry. It also pointed to the timeline of Custodia’s filings, noting the Federal Reserve Bank of Kansas City denied the master account request in 2023 after the bank applied in 2020, and the Tenth Circuit later upheld the Fed’s discretion.
With the appeals court voting 7 to 3 against rehearing in March, the Supreme Court has been described as Custodia’s only remaining avenue for review, the filing said. Cointelegraph reported the amicus brief and the broader context that other crypto companies have been gaining access to the US banking system, including federal charters and, in one case, direct access to Federal Reserve services.