Custodia Bank Asks Supreme Court to Review Fed Ruling
The crypto-focused bank seeks high-court review of a ruling upholding the Kansas City Fed's denial of a master account.
Updated on Nov. 3, 2026 in Banking
Custodia Bank has asked the U.S. Supreme Court to review a Federal Reserve master account ruling, filing a reply brief on October 28 in docket No. 26-62. The Supreme Court has set the petition for a November 13 conference.
Why it matters
A master account gives a bank direct access to Federal Reserve payment services, so the dispute bears on whether institutions with nontraditional business models can connect to the central payments system. The Federal Reserve Board and Kansas City Fed have asked the justices to deny review.
The dispute centers on one of the Federal Reserve's 12 regional banks, which denied Custodia's October 2020 account application in January 2023. Whether the Supreme Court will take up the petition is unresolved until after the November 13 conference.
The players
Custodia Bank
Custodia Bank is a Wyoming-chartered institution focused on digital assets that is challenging the Federal Reserve's denial of its account.
Federal Reserve Bank of Kansas City
The Kansas City Fed is one of the Federal Reserve's 12 regional banks and is the institution that denied Custodia's master account application.
The details
Custodia argues the Monetary Control Act of 1980 requires Federal Reserve services for eligible banks outside the Federal Reserve System. The Federal Reserve Board and Kansas City Fed counter that the Federal Reserve Act gives regional Reserve Banks discretion over accepting deposits, and the Kansas City Fed cited risks tied to Custodia's crypto-focused business model.
Timeline
October 2020: Custodia applied for a Kansas City Fed master account.
January 2023: The Kansas City Fed denied the application.
October 31, 2025: The 10th Circuit affirmed the ruling for the Federal Reserve.
March 13, 2026: The full appeals court denied rehearing.
November 13, 2026: The Supreme Court is scheduled to consider the petition at conference.
Market Dynamics
The case tests how far the Monetary Control Act of 1980, which requires Federal Reserve services for eligible banks outside the Federal Reserve System, extends to nontraditional institutions. The outcome could shape whether crypto-focused banks can reach the central payments system directly.
The outcome could determine whether digital-asset firms can open direct accounts at the Federal Reserve, affecting how they move money and hold reserves. Account holders and customers of such institutions may see changes in payment access depending on the ruling.
The takeaway
The case highlights that access to Federal Reserve payment services is not automatic even for institutions that meet eligibility criteria. Readers following crypto banking should watch the Supreme Court's November 13 conference for whether the justices take up the question.
What happens next
The Supreme Court is scheduled to consider Custodia's petition at its November 13, 2026 conference.
Further reading
For related coverage, explore Banking news and analysis.
Source note: This article includes information reported by TokenPost.
