Custodia Bank has won more time to appeal to the US Supreme Court regarding its disagreement with the Federal Reserve. Justice Neil Gorsuch approved the bank’s request for an extension to submit its petition.
The digital asset bank, which is based in Wyoming, has until July 11, 2026, to appeal a decision. It’s challenging the Federal Reserve’s refusal to grant it a master account, according to case number 25A1320 filed with the Supreme Court.
Background to the Fed Account Denial
Custodia, founded by Caitlin Long, applied for a Kansas City Fed master account in October 2020.
As an analyst, I can confirm the Federal Reserve officially rejected the application in January 2023. The primary reason given by officials was concerns about the safety and stability of the business model, which heavily focused on cryptocurrency.
In October 2025, a 10th Circuit Court panel made a 2-1 ruling stating that Reserve Banks have the final say on who can access master accounts.
The ruling determined that the Federal Reserve Act gives the Federal Reserve the power to approve or reject qualified banks and financial institutions.
A 7-3 vote denied en banc rehearing in March 2026, prompting Custodia to seek Supreme Court review.
What a Supreme Court Review Would Decide
The core issue is the Monetary Control Act of 1980. Custodia contends that this law mandates Federal Reserve Banks to offer the same payment services to all qualifying banks, regardless of whether they are members of the Federal Reserve System.
The legal battle between Custodia Bank and the Federal Reserve could end up before the Supreme Court. Justice Neil Gorsuch has given Custodia more time – until July 11th – to formally request the court review the case. At the heart of the dispute is whether the Federal Reserve has too much power to reject applications, and if its decisions are subject to oversight.
— TFTC (@TFTC21) May 29, 2026
The Federal Reserve argues the law deals with pricing *after* services have been delivered, not with who qualifies for an account. Banking industry groups have backed the Fed’s interpretation in filings submitted to lower courts.
If the Supreme Court rules in favor of Custodia, it could restrict the Federal Reserve’s power to refuse master accounts to banks and other financial institutions that legally qualify for them.
As an analyst, I see this decision as potentially significant for companies in the fintech and crypto banking spaces. It could really affect their ability to directly connect to key payment systems like Fedwire and ACH.
If the Supreme Court doesn’t take the case, it’s basically saying the Federal Reserve has pretty much unlimited power over who can participate in the payment system. As a crypto investor, that’s a little concerning because it could significantly impact how digital assets are integrated into the broader financial landscape. It means the Fed could potentially block or heavily regulate crypto payment platforms, and that’s something I’m keeping a close eye on.
Custodia is represented by Kannon K. Shanmugam of Davis Polk.
It’s still unclear if the Court will hear the case, as it’s difficult for them to accept cases dealing with how laws are interpreted.
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2026-05-30 16:42