The authority to grant master accounts lies with the Federal Reserve Banks, which allows financial institutions to have direct access to the U.S. money supply. However, Custodia Bank recently faced a setback when a Wyoming court ruled that it did not have the right to a Federal Reserve master account. In response, the digital asset bank has filed a notice of appeal with the U.S. District Court for the District of Wyoming.
This notice of appeal marks the latest development in an ongoing dispute between Custodia Bank and the central bank regarding the bank’s potential access to the payment systems. The filing was made by Custodia’s legal team, who are seeking to challenge the previous ruling made by Judge Scott Skavdahl.
According to Judge Skavdahl’s ruling in March, the Federal Reserve Banks have the authority to grant master accounts to financial institutions. These master accounts provide direct access to the U.S. money supply and enable access to the Federal Reserve’s payment systems. Without a master account, some institutions are forced to rely on partner banks to access these services.
The judge’s ruling also shed light on the history of Custodia’s master account application. In 2020, the company, founded by Wall Street professional Caitlin Long, submitted its application to the Kansas City Fed. However, the Board of Governors of the Federal Reserve System sought to take control of the decision-making process in 2021. Subsequently, Custodia took legal action in 2022 by suing the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City for their delayed decision. Ultimately, in January 2023, Custodia’s request for a master account was denied.
In other cryptocurrency news, the decentralized exchange ShibaSwap has made a significant move to Shibarium, offering new innovations. This development highlights the ever-changing landscape of the crypto industry.