Fed master account access divides Kraken and Custodia’s crypto banks
A Wyoming-based crypto bank’s four-year fight for a bank account at the Federal Reserve just picked up a powerful ally. The Blockchain Association has filed an amicus brief backing Custodia Bank’s petition to the Supreme Court, arguing that regional Fed banks should not have unchecked power to shut lawful crypto firms out of the payment system. At the heart of the case is a question that could reshape Fed master account access for every digital asset company trying to plug into the traditional banking system: does a regional Federal Reserve Bank have the discretion to deny a state-chartered, eligible institution the account it needs to move money?
Key takeaways
- The Blockchain Association filed an amicus brief on Wednesday supporting Custodia Bank’s Supreme Court petition over Fed master account access.
- The Kansas City Fed denied Custodia’s application in January 2023, citing concerns tied to its crypto-related business model.
- Custodia lost in district court in 2024 and at the 10th Circuit in 2025; a full rehearing was denied 7-3 in March 2026.
- Custodia petitioned the Supreme Court in August 2026, and the Kansas City Fed must respond by September 11.
- Kraken Financial received a limited-purpose master account from the Kansas City Fed in March 2026, becoming the first crypto-native firm to hold one.
Blockchain Association Supports Custodia Bank’s Supreme Court Petition
The trade group is asking the Supreme Court to decide whether Fed banks can legally reject eligible, state-approved banks from the payment system without meaningful oversight. In its Wednesday filing, the Blockchain Association urged the justices to take up Custodia’s case and clarify the limits of regional Fed discretion over master account approvals.
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