Blockchain Association Backs Custodia Bank in Supreme Court Fight Over Fed Master Account

Highlights:

• The Blockchain Association wants eligible banks to get fair access to the Federal Reserve’s payment system.
• Custodia Bank wants the U.S. Supreme Court to decide whether the Fed can reject eligible banks seeking master accounts.
• The case could affect how digital asset banks access banking services in the future.

The Blockchain Association, a crypto lobbying group, has filed an amicus brief supporting Custodia Bank’s petition before the U.S. Supreme Court. The group wants the court to decide whether regional Federal Reserve Banks can deny master accounts to eligible state-chartered banks. It argued that the ruling could determine whether lawful digital asset banks can directly access the Federal Reserve’s payment system.

1/ Today, we filed an amicus brief in support of Custodia Bank's petition before the U.S. Supreme Court.

The case raises a fundamental question: do federal regulators have discretion to effectively cut off lawful digital asset businesses with state-approved banking models from… pic.twitter.com/pk9LZBAY4w

— Blockchain Association (@BlockchainAssn) August 12, 2026

The association argued that federal regulators should not deny lawful industries essential banking services through regulatory pressure or unchecked administrative discretion. It also said lawful digital asset businesses should receive the same access to banking infrastructure that other eligible financial institutions already receive.

Meanwhile, the association warned that earlier court decisions could allow federal regulators to deny banking services to industries they disfavor without interference from state regulators. It urged the Supreme Court to clarify whether the Monetary Control Act gives regional Federal Reserve Banks authority to deny master accounts to eligible institutions.

Custodia Bank, the Wyoming-chartered digital asset bank started by Caitlin Long, made its bid for a Federal Reserve master account in October 2020. Custodia wanted access to the Federal Reserve’s payment system directly, rather than through other banks acting as intermediaries. The Federal Reserve, however, failed to respond to Custodia’s request for 19 months. Therefore, Custodia sued the Federal Reserve Bank of Kansas City.

Why Blockchain Association Says the Case Could Shape Banking Access

The Kansas City Fed denied Custodia’s application because it said the bank’s crypto-focused business model created safety and financial stability concerns. However, Custodia argued that the Monetary Control Act requires the Federal Reserve to provide payment services to every eligible nonmember institution. Custodia also argued that regional Federal Reserve Banks cannot reject legally eligible applicants through administrative discretion.

Last month, Custodia petitioned the U.S. Supreme Court to review whether regional Federal Reserve Banks can deny master accounts to eligible institutions. The petition asks the justices to determine whether the Monetary Control Act allows regional Federal Reserve Banks to deny master accounts to otherwise eligible nonmember institutions.

Custodia Bank, which provides financial services to cryptocurrency companies, has asked the US Supreme Court to review claims that it has been unlawfully denied access to the Federal Reserve payment system https://t.co/D3H5NFVHi5

— Bloomberg (@business) July 10, 2026

Meanwhile, the Custodia case contrasts with the Kansas City Fed’s later decision to grant Kraken Financial limited access to Federal Reserve payment services. Earlier this year, the Kansas City Fed granted Kraken Financial a limited-purpose master account. The approval made Kraken Financial the first crypto-native company to receive a limited-purpose Federal Reserve master account.

Custodia Case Extends Beyond One Digital Asset Bank

The Custodia dispute could determine how future state-chartered digital asset banks access Federal Reserve payment services if the Supreme Court reviews the case. A Supreme Court review could clarify whether the Monetary Control Act allows regional Federal Reserve Banks to deny master accounts to eligible state-chartered institutions.

The latest filing comes days after the Blockchain Association defended the Digital Asset Market Clarity Act in a letter to Senate leaders. In a letter to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer, the association rejected claims that the Digital Asset Market Clarity Act would weaken anti-money laundering protections.