Blockchain Association Supports Custodia: Fed’s Authority Before the Supreme Court

The Blockchain Association has voiced its support for the Supreme Court process regarding Custodia Bank’s “master account” application, which was rejected by the Fed.

Representing the crypto industry, the Blockchain Association joined the case on Wednesday by filing an amicus brief with the court. The organization requested the Supreme Court to examine whether regional Fed banks have the authority to deny master account access to state-chartered banks that meet the necessary requirements. This account allows banks to connect directly to the central bank’s payment systems.

According to the association, no legal industry should be excluded from essential banking services through regulatory pressure or unchecked administrative discretion. The organization stated that the case is about whether legal digital asset companies can compete on a level playing field in the banking sector. Furthermore, it warned that lower court rulings could set a precedent for excluding certain industries from the banking system without intervention from state regulators.

Custodia’s Fight for a Fed Master Account

Crypto-focused Custodia Bank filed its application in October 2020. The Kansas City Fed rejected the bank’s application in January 2023, citing concerns regarding its crypto-linked business model. The Wyoming-based bank filed a lawsuit in June 2022 over a 19-month processing delay, arguing that federal law mandates account access be granted to eligible institutions. Custodia lost in the district court in 2024 and in the 10th Circuit Court of Appeals in 2025. A request for a rehearing was also rejected in March 2026 with a 7-3 vote.

Custodia petitioned the Supreme Court last month to examine whether the provision under the Monetary Control Act grants regional Fed banks the authority to deny accounts. The Kansas City Fed is required to respond to the application by September 11. In the meantime, Kraken Financial became the first crypto-native company to receive a limited-purpose master account in March 2026. The account provides access to payment rails used for high-value dollar transactions but does not grant the right to earn interest on reserve balances.