Custodia Bank petitions for a rare en banc review challenging the Tenth Circuit’s decision against its Fed master account application.
- Custodia Bank challenges Tenth Circuit ruling with en banc petition.
- Court’s decision affects crypto banks’ Fed access.
- Potential constitutional implications and state authority concerns.
Custodia Bank has petitioned for a full-court review of the Tenth Circuit’s October decision denying its master account application at the Federal Reserve Bank of Kansas City.
The case challenges federal discretion over crypto bank access, influencing future regulatory landscapes and possibly impacting similar applications from industry players like Crypto.com and Ripple.
Custodia Bank filed a petition for en banc review to challenge an October Tenth Circuit decision regarding its Federal Reserve account application.
This action questions the court’s interpretation and the Federal Reserve’s discretion over crypto-focused state banks.
Full-Court Review Sought After Application Denial
Custodia Bank has asked for a rare, full-court review of its October decision. The crypto-focused institution appeals the three-judge panel’s ruling affirming its application denial.
The Federal Reserve Bank of Kansas City denied Custodia Bank’s master account application, prompting the appeal. Custodia argues that court decisions “undermine state banking authority.”
Denial Limits Market Access for Custodia Bank
The denial limits Custodia Bank’s operations, affecting its ability to autonomously access the Fed’s payment systems. This impacts its market positioning within the U.S.
The case has broader political implications, as the court’s decision reinforces Federal Reserve discretion, potentially setting a precedent for future crypto banking applications.
Ruling Reflects Ongoing Jurisdictional Tensions
The October ruling aligns with past decisions upholding Fed discretion, diverging from initial district court rulings that allowed certain claims. This highlights ongoing jurisdictional tensions.
If Custodia prevails, the case could reshape Fed access policies for crypto banks and delineate clearer access rights under existing statutes, altering future applications.
“SPDI holders like Custodia or Kraken may qualify for proposed ‘skinny’ master accounts… but decisions remain at the Fed’s discretion,” noted Christopher Waller, Federal Reserve Governor.
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