The Blockchain Association has filed an amicus brief with the U.S. Supreme Court, urging the justices to review a case involving Custodia Bank and the Federal Reserve. The brief supports Custodia Bank’s petition and argues that the Federal Reserve should not possess the authority to deny payment system access to eligible state-chartered banks. The association contends that a recent lower court ruling in favor of the Fed could allow regulators to effectively exclude lawful businesses, particularly within the digital asset industry, from the financial system.
Core Dispute Over Payment System Access
The central issue involves Custodia Bank, a state-chartered bank based in Wyoming offering digital-asset services, which has been seeking a master account with the Federal Reserve. Such an account would grant direct access to the U.S. payments system. However, an appeals panel ruled in October that eligibility alone did not entitle Custodia to a master account. Custodia Bank subsequently requested a rehearing of the case by the full Tenth Circuit in December.
Arguments Against Federal Reserve Authority
The Blockchain Association argues that the Federal Reserve’s actions threaten the integrity of the dual banking system, where both state and federal authorities can charter banks. According to the association, if the lower court’s ruling stands, federal regulators could override state banking decisions by controlling access to essential financial infrastructure. The crypto trade group stated that this scenario provides federal regulators a “quiet way to cut lawful businesses out of the banking system.”
Concerns Over Regulatory Overreach and Historical Parallels
In their brief, the Blockchain Association also drew parallels to “Operation Choke Point 2.0.” They described this as a program from the prior administration that allegedly used “vague rules, excessive discretion, informal guidance, and aggressive enforcement actions to pressure banks away from serving digital asset clients” and engaging with digital assets. The association views Custodia’s fight as the latest phase of this alleged campaign.
The Blockchain Association argues that the Federal Reserve’s decision ratifies what they perceive as the Fed’s “misuse of its payment services to further an impermissible policy goal—debanking the digital-asset industry.” They further claim that federal regulators, “based on their own discretionary whims, can intrude on state prerogatives and debank lawful businesses,” a question they deem of “exceptional importance with broad consequences for the national economy.”
An amicus brief, meaning “friend of the court,” is a legal filing submitted by a party not directly involved in a case but who has a strong interest in the subject matter. These briefs provide additional arguments and context to help the court make its decision.
Uncertainty and Next Steps
Key uncertainties remain regarding the case. It is not yet determined whether the Supreme Court will agree to hear Custodia Bank’s petition. Furthermore, the extent of the Federal Reserve’s ultimate control over access to the U.S. payments system remains a subject of ongoing legal and regulatory debate.
Why This Matters
The Blockchain Association has filed a brief supporting Custodia Bank’s petition to the Supreme Court, raising questions about the Federal Reserve’s authority over payment system access for state-chartered banks. Whether the Supreme Court will agree to hear the case remains uncertain.
Broader Context
The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve.
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