The Blockchain Association filed an amicus brief on August 13, 2026, urging the U.S. Supreme Court to take up Custodia Bank’s petition challenging the Federal Reserve’s denial of a master account. The case could reshape how crypto-focused firms access the U.S. payments infrastructure.
🔑 Key takeaways
- The Blockchain Association filed its amicus brief on August 13, 2026
- Custodia Bank has been fighting the Fed’s master account denial since 2020
- The 10th Circuit Court of Appeals upheld the Fed’s refusal in a 2-1 decision on October 31, 2025
- Wyoming, the Digital Chamber and several GOP senators back Custodia
- Major U.S. banking trade groups (ABA, BPI, CBA) defend the Fed’s position
A dispute dating back to 2020
Custodia Bank is a special purpose depository institution (SPDI) chartered by the State of Wyoming, focused on custody and services for digital assets. In 2020, it filed a formal application for a master account with the Federal Reserve Bank of Kansas City.
A master account grants a bank direct access to the Federal Reserve’s payment services, including Fedwire (real-time interbank transfers) and the ACH network (automated clearinghouse payments). Without it, a bank must rely on correspondent banks, adding costs, delays and operational dependence on traditional intermediaries.
The Kansas City Fed acknowledged Custodia’s statutory eligibility but denied the application, citing concerns that the bank’s crypto-centric business model posed excessive risks to the stability of the Fed’s payment systems and services. That initial rejection opened a multi-year legal battle that has become one of the reference cases on crypto firms’ access to U.S. financial infrastructure.
The 10th Circuit ruling and Fed discretion
On October 31, 2025, the U.S. Court of Appeals for the Tenth Circuit ruled 2-1 that the Federal Reserve has the authority to deny master account access to a crypto-focused firm. The panel consisted of Judges TYMKOVICH, EBEL and ROSSMAN, with a notable dissent.
« This decision reinforces dependence on traditional banking intermediaries for crypto-native firms and could push some toward seeking full OCC charters as a slower but more reliable path to payment system access. »
Logan Payne, Legal Analyst at Winston Taylor
In its ruling, the Tenth Circuit held that the plain language of the applicable statutes gives regional Federal Reserve Banks discretionary authority to approve or deny master account applications. The court found that neither the Federal Reserve Act nor the Monetary Control Act of 1980 mandates automatic access for all eligible institutions. It also rejected Custodia’s constitutional claims.
The active judges of the Tenth Circuit subsequently declined to rehear the case en banc (before the full court), further cementing the statutory reading that grants Fed member banks unreviewable power to deny master accounts. For Custodia, the judicial margin of action now narrows to the Supreme Court.
| Date | Event |
|---|---|
| 2020 | Custodia files its master account application with the Kansas City Fed |
| October 31, 2025 | 2-1 Tenth Circuit ruling upholding the Fed’s right to deny access |
| July 10, 2026 | Custodia files its writ of certiorari at the Supreme Court |
| August 13, 2026 | The Blockchain Association files its amicus brief |
The Supreme Court petition and amicus filings
On July 10, 2026, Custodia Bank filed a writ of certiorari (a request for Supreme Court review) with the U.S. Supreme Court. One month later, on August 13, 2026, the Blockchain Association announced it had filed an amicus brief supporting the petition, joining several other organizations backing Supreme Court review.
The mobilization reflects the strategic importance of this case for the entire digital asset sector. Alongside the Blockchain Association, supporters include the State of Wyoming (which chartered Custodia), the Digital Chamber, the Global Blockchain Business Council-USA, as well as several lawmakers: Senators Cynthia M. Lummis and Steve Daines, and former Senator Patrick J. Toomey.
| Side | Organizations |
|---|---|
| Supporting Custodia | Blockchain Association, State of Wyoming, Digital Chamber, Global Blockchain Business Council-USA, Senators Cynthia Lummis, Steve Daines, former Senator Patrick J. Toomey |
| Supporting the Fed | Federal Reserve Banks, Bank Policy Institute, Clearing House Association, Independent Community Bankers of America, Consumer Bankers Association, American Bankers Association, Wyoming Bankers Association |
On the opposing side, the Federal Reserve Banks, the Bank Policy Institute, the Clearing House Association, the Independent Community Bankers of America, the Consumer Bankers Association, the American Bankers Association and the Wyoming Bankers Association filed briefs supporting the Fed. The coalition underscores the unified stance of the traditional banking industry against granting direct access to federal payment rails to a crypto-centric bank.
Stakes for the crypto ecosystem
« Without congressional action, the Supreme Court is the only remaining recourse for Custodia. »
Logan Payne, Legal Analyst at Winston Taylor
This case extends well beyond Custodia itself. It raises the fundamental question of how crypto firms can access U.S. federal payment infrastructure — a central issue for the sector’s development in the United States. The fate of dozens of projects seeking to offer on-chain (blockchain-based) financial services depends on it.
« Given the importance of this decision, which extends beyond the digital asset sector, along with the strong dissents within the Tenth Circuit, this case could be a strong candidate for Supreme Court review. »
Logan Payne, Legal Analyst at Winston Taylor
Several observers note that the case touches the boundary between regulated monetary policy and financial innovation. The final ruling, whatever its outcome, will set a durable precedent for every non-member financial institution seeking direct access to U.S. payment rails. For crypto players, the stakes are clear: either secure a framework for direct access, or remain dependent on banking intermediaries often reluctant to serve the sector.
Conclusion
At this stage, absent congressional action, the Supreme Court remains Custodia Bank’s last avenue. If the high court grants certiorari, it will have to decide a systemic question: does the Federal Reserve hold absolute discretion to deny master account access, or is that discretion constrained by statute?
Legal observers argue that the dissent within the Tenth Circuit and the cross-sector implications could help clear the certiorari threshold. Whatever the outcome, the case will shape the future relationship between traditional financial institutions and the digital economy in the United States, with potential consequences for the competitiveness of the U.S. crypto sector and the attractiveness of alternative banking charters such as Wyoming’s SPDI framework.
Sources
- The Block — Blockchain Association backs Custodia petition (August 13, 2026)
- Justia — Tenth Circuit decision of October 31, 2025
- Winston Taylor — Logan Payne’s analysis in the National Law Journal
- Yahoo Finance — Custodia Bank takes Fed master account fight to Supreme Court
- Bloomberg — Custodia Bank Asks US Supreme Court to Review Fed Account Denial (July 10, 2026)
- Texas Bankers Association — Appeals Court backs Fed’s decision
This article is for informational and educational purposes only. It does not constitute investment advice. Do your own research (DYOR) before making any decision.
