In brief
- The Blockchain Association filed an amicus brief supporting Custodia Bank’s petition for Supreme Court review.
- Custodia is challenging a ruling that upheld the Fed’s denial of its master account application.
- The group says the case could shape how much power federal regulators have over state-chartered banks.
The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve, arguing the central bank should not have the broad power to deny payment system access to eligible state-chartered banks.
In the amicus brief filed on Wednesday supporting Custodia’s petition, the crypto trade group said a lower court ruling in favor of the Fed gives federal regulators a quiet way to cut lawful businesses out of the banking system.
"The decision ratifies the Fed’s misuse of its payment services to further an impermissible policy goal—debanking the digital-asset industry,” the Blockchain Association wrote.
An amicus brief is a legal filing from someone who is not a party to a case but wants to give the court additional arguments or context. Here, the Blockchain Association is supporting Custodia’s request that the Supreme Court review the dispute.
At issue is Custodia’s bid for a Federal Reserve “master account.” Custodia is a so-called crypto bank based in Wyoming, offering services including digital-asset custody, payments and settlement infrastructure, and dollar-backed stablecoin-related products to institutional clients. It has spent years seeking a master account, which would allow it to settle payments directly with the central bank. In October, an appeals panel ruled that eligibility alone did not entitle Custodia to an account. In December, the bank asked the full Tenth Circuit to rehear the case.
The Blockchain Association argues the Fed’s denial threatens the dual banking system, where both state and federal authorities can charter banks. If the ruling stands, the association says, federal regulators could override state banking decisions by denying access to the payments system.
“Whether federal regulators, based on their own discretionary whims, can intrude on state prerogatives and debank lawful businesses is a question of exceptional importance with broad consequences for the national economy,” they wrote.
