Tenth Circuit Denies Custodia Bank Rehearing on Federal Reserve Master Account
Here's what it means for you.
The ruling underscores the Federal Reserve's authority over crypto bank operations, which could shape the future landscape of digital asset banking.
What happened
On March 13, 2026, the Tenth Circuit Court upheld the Federal Reserve's denial of Custodia Bank's request for a master account.
The Context
- Custodia Bank, founded by Caitlin Long, sought a master account to directly access payment systems but was denied due to perceived risks associated with its crypto model.
- Legal Journey: Custodia's litigation began in 2022, culminating in a 7-3 decision that rejected its claim for a rehearing, reinforcing the Fed's discretion.
- Dissenting Opinion: Judge Tymkovich argued that the denial of a master account is detrimental to bank operations, highlighting ongoing tensions in crypto regulation.
The Number
The vote split denying rehearing en banc illustrates the divided views on access to Federal Reserve infrastructure, impacting how crypto banks may operate in the future.
Takeaway
Expect continued scrutiny and regulatory challenges for crypto banks as they navigate the evolving landscape of traditional financial systems.
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