Custodia Bank asks U.S. Supreme Court to review Fed master account dispute

Custodia Bank has petitioned the U.S. Supreme Court for review in its dispute over access to a Federal Reserve master account. The bank is asking the court to determine whether the president of a regional Federal Reserve Bank has the authority to deny master account services to an institution. Custodia had applied for a Fed master account multiple times and was denied in 2023. The Federal Reserve said the bank’s novel business model and its planned focus on crypto assets posed significant safety and soundness risks. After that decision, Custodia appealed to the U.S. Court of Appeals for the Tenth Circuit. In 2024, the Tenth Circuit sided with the Federal Reserve Bank of Kansas City. Custodia has now taken the matter to the nation’s highest court, where the filing seeks a review of the legal authority behind the denial. The U.S. Supreme Court is expected to decide in October whether it will hear the case. The dispute has drawn attention because it centers on access to core Federal Reserve payment infrastructure and how that access is handled for institutions with crypto-related business plans.