Blockchain Association Backs Custodia in Supreme Court Fed Account Case

The Blockchain Association, a major crypto industry group, has filed a legal brief urging the U.S. Supreme Court to hear a case challenging the Federal Reserve's authority to deny payment system access to eligible state-chartered banks. The filing, submitted on August 13, 2026, supports a petition from Custodia Bank, a Wyoming-chartered digital asset institution, which has been locked in a multi-year legal battle over the Fed's refusal to grant it a master account.

At the heart of the dispute is Custodia's application for a Federal Reserve master account, which would allow it to settle payments directly with the central bank instead of relying on intermediary institutions. Custodia applied for the account in 2020, but the Federal Reserve Bank of Kansas City formally denied the request in 2023, citing safety and soundness concerns related to the bank's crypto-focused business model. Custodia subsequently sued, arguing that federal law requires the Fed to provide payment services to eligible nonmember banks. However, a federal district court and the Tenth Circuit Court of Appeals both ruled in favor of the Fed, finding that regional Reserve Banks retain discretion over such...