Appeals court denies Custodia a path to a Fed master account

Core Viewpoint - The appeals court ruled that Custodia, a cryptocurrency bank, cannot compel the Federal Reserve to grant it a master account, affirming the Fed's discretion in such matters [2][5]. Group 1: Court Ruling - The 10th Circuit Court of Appeals concluded that the Federal Reserve Banks have the discretion to reject master account access requests from eligible entities [2]. - The ruling emphasized that the issue of the Fed's discretion has been examined by courts since the founding of the nation, despite the modern context of cryptocurrency and digital assets [3]. Group 2: Custodia's Position - Custodia argued that the laws governing master accounts require the Fed to grant access to any eligible depository institution, but the court disagreed with this interpretation [2]. - Following the ruling, Custodia expressed some satisfaction with a strong dissent from Judge Timothy Tymkovich, who criticized the majority for allowing unreviewable executive authority by the Fed [4]. Group 3: Implications and Next Steps - The majority ruling supports a previous judgment from March 2024 by a federal district court in Wyoming, which stated that the Fed must have discretion to deny master account applications to protect the financial system [5]. - Custodia is considering petitioning the 10th Circuit for a rehearing, indicating that the legal battle may continue [5].