Quick Take
- The Blockchain Association filed an amicus brief on Wednesday in support of Custodia Bank‘s Supreme Court petition challenging the Fed’s denial of master account access.
- The industry group said the case is about ensuring “lawful digital asset businesses can compete on equal footing.”
The Blockchain Association has filed an amicus brief in support of Custodia Bank's Supreme Court petition challenging the Fed's denial of master account access.
In a Wednesday filing, the industry group urged the court to review whether regional Fed banks have the discretion to reject eligible state-approved banks' access to master accounts.
A Fed master account could give financial institutions direct access to the central bank's payment systems, which is key infrastructure for banks serving digital asset clients.
“No lawful industry should be excluded from essential banking services through regulatory pressure or unchecked administrative discretion,” the association wrote in a thread of posts on X, adding that the case is about ensuring “lawful digital asset businesses can compete on equal footing.”
In its amicus brief, the association also cautioned that prior lower courts' rulings provide “a blueprint for federal regulators to debank disfavored industries or companies in the future without interference from state regulators.”
Years-long legal battle
Custodia Bank, a Wyoming-chartered crypto-focused institution founded by Wall Street veteran Caitlin Long, first applied for a master account in October 2020. The Kansas City Fed denied the application in January 2023, citing concerns about the bank's crypto-related business model.
Custodia sued the Kansas City Fed in June 2022, initially over the 19-month processing delay and later arguing that federal law requires access for eligible institutions. The bank lost in district court in 2024, followed by a court ruling against it at the 10th Circuit in 2025. The full appeals court then denied a rehearing in a 7-3 decision in March 2026.
Last month, Custodia petitioned the Supreme Court to take up the case. It is requesting the court to review whether the Monetary Control Act — which states that the Fed shall provide services to eligible nonmember institutions — gives regional Fed banks discretionary authority to deny master accounts to such institutions.
The Kansas City Fed is due to respond to Custodia's petition by Sept. 11.
While Custodia has not succeeded so far, the Kansas City Fed granted Kraken Financial a limited-purpose master account in March 2026, making it the first crypto-native firm to receive one.
The arrangement gave Kraken access to core payment rails used for high-value dollar settlement, potentially enabling faster deposits and withdrawals for institutional clients — though it comes with limits, including no access to interest on reserves.