Crypto Group Backs Custodia in Supreme Court Fed Fight
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- Blockchain Association filed a Supreme Court brief backing Custodia's petition challenging the Fed's denial of its request for a master account and direct access to Fed payment rails.
- Custodia was rejected by the Federal Reserve Bank of Kansas City in 2023, while Kraken Financial received a limited-purpose master account from the same regional Fed bank in March, gaining direct access to Fedwire.
- Coinbase received conditional OCC approval in April to establish a national trust company, bringing its custody business under federal oversight without authority to take retail deposits or operate as a commercial bank.
- Circle received final OCC approval for its national trust bank in July, with Kraken parent Payward applying for its own national trust company charter the following month.
- The OCC in December conditionally approved national trust bank applications from Ripple, BitGo, Fidelity Digital Assets, and Paxos, bringing the total of crypto firms with federal banking frameworks or pending applications to at least seven since March.
- The Independent Community Bankers of America opposed Coinbase's approval, arguing crypto companies are seeking the benefits of bank charters without the full regulatory framework applied to traditional banks.
Why it matters: Custodia's case tests whether the Fed can arbitrarily deny crypto firms banking access — a live question as seven other crypto firms have secured or applied for federal trust charters since March. The Independent Community Bankers of America frames the trend as crypto cherry-picking regulatory benefits without full banking oversight, meaning a Custodia win could force the Fed to either open or close its gates industry-wide.
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