The Digital Chamber (TDC) has filed an amicus brief in the case of Custodia Bank, Inc. v. Federal Reserve Board of Governors, No. 24-8024, currently before the United States Court of Appeals for the Tenth Circuit. This case challenges the decision by the Federal Reserve Bank of Kansas City (FRBKC) to deny Custodia Bank’s application for a Federal Reserve master account. 

Why TDC Filed This Brief 

We filed this amicus brief to advocate for the fair treatment of state-chartered financial institutions, particularly those integrating digital assets with traditional banking systems. The decision to deny Custodia Bank a Federal Reserve master account threatens the innovative financial frameworks established by states like Wyoming. By filing this brief, we’re aiming to protect the burgeoning blockchain industry from regulatory overreach and ensure that lawful businesses are not unfairly penalized based on their involvement with cryptocurrency. 

Key Points of the Case 

  1. Federalism and State Innovation: The denial by FRBKC undermines the dual banking system that allows states like Wyoming to charter innovative financial institutions such as special purpose depository institutions (SPDIs). Wyoming’s regulatory framework for SPDIs was designed to bridge the gap between digital assets and traditional financial systems, and was developed with significant input from various stakeholders, including FRBKC. This case threatens to nullify state efforts to innovate and regulate effectively within their jurisdictions. 
  1. Constitutional Concerns: The district court’s interpretation raises serious constitutional issues, particularly concerning Article II. By allowing Federal Reserve Bank presidents unfettered discretion to deny master accounts, the decision undermines the constitutional framework for appointing and overseeing federal officials with significant authority. This challenges the principles of political accountability and democratic checks and balances enshrined in the Constitution. 
  1. Impact on the Blockchain Industry: The decision to deny state-chartered banks access to the national banking system based solely on their involvement with cryptocurrency sets a troubling precedent. It poses a direct threat to the sustained growth of the blockchain industry by potentially allowing federal regulators to stifle industries they disfavor, regardless of their compliance with legal standards. 

Our Arguments 

Our brief emphasizes: 

  • The necessity for clear statutory interpretation that respects the mandatory language of 12 U.S.C. §248a(c)(2), which requires Federal Reserve services to be available to nonmember depository institutions. 
  • The importance of maintaining the balance of state and federal authority in banking regulation, which fosters innovation and consumer benefits.
  • The constitutional requirement for political accountability in the exercise of significant discretionary power by federal officials. 

Next Steps 

We strongly believe that this case has profound implications for the digital asset and blockchain industry. Our amicus brief argues for the reversal of the district court’s decision to protect the rights of state-chartered banks and uphold fair access to essential banking services. 

Stay Informed 

We encourage all members to read the full amicus brief to understand the detailed arguments and potential impact of this case. You can access the brief here.


We extend our heartfelt thanks to the law firm Clement & Murphy for their exceptional leadership in drafting this brief. We also thank our members who contributed their expertise and insights during the drafting process. Additionally, we appreciate the Global Blockchain Business Council for joining us in this crucial effort to ensure that innovation can thrive within the U.S. banking system and that the cryptocurrency industry is protected from unjust discrimination.  

Together, we are committed to fostering a regulatory environment that supports growth and innovation in the digital asset space. 

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