The Blockchain Association has filed an amicus brief backing Custodia Bank's Supreme Court petition over the Federal Reserve's refusal to grant it a master account. The industry group argues regional Fed banks lack discretion to reject eligible, state-approved institutions, and warns that letting the current rulings stand hands regulators a blueprint for debanking disfavored industries.
The Blockchain Association filed an amicus brief on Wednesday supporting Custodia Bank's Supreme Court petition challenging the Fed's denial of master account access. The filing urges the court to review whether regional Fed banks have discretion to reject eligible state-approved banks seeking master accounts, which grant direct access to the central bank's payment systems.
According to The Block, the association said the case is about ensuring "lawful digital asset businesses can compete on equal footing". It also argued that prior lower-court rulings give federal regulators a blueprint to debank disfavored industries without interference from state regulators.
Years of litigation over the account
Custodia Bank, a Wyoming-chartered crypto-focused institution founded by 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.
The bank then sued the Kansas City Fed in June 2022, initially over the delay and later arguing federal law requires access for eligible institutions. It lost in district court in 2024, then lost again at the 10th Circuit in 2025. The full appeals court denied a rehearing in a 7-3 decision in March 2026.
Supreme Court petition now pending
Last month, Custodia petitioned the Supreme Court to take up the case, asking it to decide whether the Monetary Control Act gives regional Fed banks discretionary authority to deny master accounts to eligible nonmember institutions. The Kansas City Fed must respond to the petition by Sept. 11.
Custodia has not succeeded so far, but 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. That arrangement gave Kraken access to core payment rails used for high-value dollar settlement, though it comes with limits, including no access to interest on reserves.
Source: The Block
Trading involves risk.
Risk Disclaimer
