The Tenth Circuit upheld the Fed’s denial of Custodia Bank’s master account, dealing a setback to crypto banking. Regulators cite stability concerns; industry warns the ruling could curb digital-asset innovation.
**Excerpt:**
Custodia Bank, a Wyoming-based crypto bank, plans to appeal the Federal Reserve’s denial of its application for a master account. This account would have allowed the bank to access the Fed’s payment system, enabling it to settle transactions in its digital currency.
Custodia’s CEO Caitlin Long believes the denial is a threat to self-custody of crypto assets. She argues that the central bank is seeking to control the flow of capital and suppress financial innovation by limiting access to its infrastructure.
The decision has drawn criticism from the crypto industry, which sees it as an attempt to stifle competition and maintain the existing financial system’s dominance. It remains to be seen whether Custodia’s appeal will succeed, but the case has significant implications for the future of digital asset regulation.