Custodia Bank Takes Fed Master Account Fight Toward Supreme Court
Custodia Bank has secured extra time to deliver its dispute with the Federal Reserve earlier than the US Supreme Court. Justice Neil Gorsuch granted the financial institution’s movement for an extension of time to file its certiorari petition.
The Wyoming-chartered digital asset financial institution now has till July 11, 2026, to file its enchantment. The petition challenges the Federal Reserve’s denial of a grasp account, per Supreme Court docket 25A1320.
Background to the Fed Account Denial
Custodia, based by Caitlin Long, utilized for a Kansas City Fed grasp account in October 2020.
The Fed formally denied the applying in January 2023. Officials cited security and soundness issues tied to the crypto-focused enterprise mannequin.
A divided tenth Circuit panel dominated 2-1 in October 2025 that Reserve Banks retain discretion over grasp account entry.
The resolution interpreted the Federal Reserve Act as granting the Federal Reserve authority to approve or deny eligible establishments.
A 7-3 vote denied en banc rehearing in March 2026, prompting Custodia to hunt Supreme Court overview.
What a Supreme Court Review Would Decide
At stake is the Monetary Control Act of 1980. Custodia argues it requires Reserve Banks to offer equal fee entry to eligible nonmember establishments.
The Fed counters that the statute addresses pricing as soon as providers are offered, not entitlement to accounts. Banking commerce teams have supported the Fed’s studying in amicus filings earlier than the decrease courts.
A Supreme Court resolution in Custodia’s favor may restrict the Fed’s capability to disclaim grasp accounts to statutorily eligible establishments.
The end result would carry implications for fintech corporations and crypto-native banks searching for direct entry to Fedwire and ACH.
A denial of certiorari would as an alternative affirm the Federal Reserve’s broad authority over fee system entry.
Custodia is represented by Kannon Ok. Shanmugam of Davis Polk.
Whether the Court grants overview stays unsure, given the high bar that statutory interpretation instances face.
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