Custodia asks the Supreme Court to review the Fed’s master account denial after lower courts backed Fed discretion. Custodia Bank has asked the U.S. Supreme Court to review its Federal Reserve master account dispute. The Wyoming crypto bank filed a certiorari petition after losing in two lower courts. The case centers on whether regional Federal Reserve Banks can deny access to eligible state-chartered banks. That access lets banks settle payments directly through the Federal Reserve system. Custodia is challenging the Kansas City Fed’s 2023 denial of its master account application. The Fed cited concerns about Custodia’s crypto-focused business model. The filing places crypto banking access back before national legal and policy observers. A Supreme Court review would decide whether the justices take up the dispute. Custodia Challenges Federal Reserve Access Denial Custodia argues that the Fed’s position changes the balance between state and federal banking authority. The bank says eligible state-chartered banks should not face broad denial powers. Its petition asks the Supreme Court to review that legal question. 🚨NEWS: Wyoming crypto bank @custodiabank has officially filed a certiorari petition with the Supreme Court, asking it to review whether regional Federal Reserve Banks have the discretion to deny eligible state-chartered banks access to master accounts. Custodia has hired a team… pic.twitter.com/56BldBAixq — Eleanor Terrett (@EleanorTerrett) July 10, 2026 A master account gives banks direct access to central bank payment rails. Without one, banks often rely on partner banks for settlement. For crypto-focused banks, that difference can affect services and operating plans. Custodia has hired legal advisers, including Davis Polk, for the Supreme Court filing. The petition says the case may affect other banks with new business models. It also raises questions about Federal Reserve Bank presidents and their powers. Lower Courts Sided With the Fed Custodia’s filing follows earlier rulings against the bank in federal court. A Wyoming district court supported the Fed’s view of its authority. A divided Tenth Circuit panel later reached a similar decision. The lower courts reviewed the Monetary Control Act in the master account dispute. They found that the Federal Reserve has broad discretion over account access. Custodia argues that this reading gives regional Fed banks too much power. The Kansas City Fed denied Custodia’s application in 2023. Its decision cited risks tied to the bank’s crypto-centered model. Custodia says its Wyoming charter should support eligibility for access to accounts. Read also – Wall Street Can’t Control Bitcoin: Custodia CEO Explains Why Crypto Banking Case Enters National Focus Crypto firms, banks, and state regulators are watching the case. It may shape how new financial firms access Federal Reserve payment systems. It also comes during wider debate over crypto banking rules. Custodia says the dispute may affect banks using innovative business models. The petition also raises constitutional questions about authority inside the Federal Reserve system. These arguments move the case beyond one bank’s application. Custodia CEO Caitlin Long could not immediately be reached for comment, according to the report. The Supreme Court has not decided whether it will hear the case. Until then, the Fed’s lower court wins remain in place. The post Custodia Takes Crypto Banking Fight to the Supreme Court in Fed Showdown appeared first on Live Bitcoin News.

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