Overview
- The appeals court ruled 2-1 that federal statutes give Reserve Banks discretion to refuse master account requests from eligible institutions.
- The panel rejected Custodia’s statutory and Administrative Procedure Act claims, finding the Federal Reserve Board’s “no‑concerns” email was not final agency action and that the Kansas City Fed made the ultimate decision.
- Judge Tymkovich dissented, arguing the Monetary Control Act’s “shall be available” language creates an enforceable right to access Fed payment services.
- Custodia, a Wyoming special purpose depository institution focused on digital-asset services and stablecoin plans, applied in 2020 and was formally denied in January 2023 after being reviewed as a Tier 3 applicant.
- Custodia said it is considering seeking rehearing, and analysts point to a pending Ninth Circuit case that could produce a circuit split and increase the likelihood of Supreme Court review.