Tenth Circuit Hands Fed a Win: Custodia Denied Master Account in Blow to Crypto Sovereignty, Dissent Brings the Heat

The Tenth Circuit Court of Appeals, in a 2-1 decision, upheld the denial of a Federal Reserve master account to Custodia Bank, a Wyoming-chartered Special Purpose Depository Institution (SPDI). This ruling grants Reserve Banks broad discretion over account access, which is crucial as master accounts are necessary for direct clearing and settlement with the Fed. The majority opinion, written by Judge Ebel, interpreted the Federal Reserve Act and Monetary Control Act to mean access decisions remain discretionary with the Reserve Banks, rejecting Custodia's statutory and APA claims. Judge Tymkovich dissented, arguing that the statute's language, specifically "shall be available," mandates access for eligible nonmember depository institutions, viewing the denial as an unlawful barrier to vital services. The outcome cements Reserve Bank discretion, while the dissent advocates for open access, setting the stage for potential Supreme Court review if a circuit split occurs with the Ninth Circuit's ruling in the related *PayServices* case.

(Source：Bitcoin Magazine)