Appeals Court Backs Fed Discretion As Custodia Loses Master Account Bid

• Tenth Circuit backs the Fed in a 2 to 1 decision, denying Custodia direct access.
• Ruling affirms full discretion over master accounts amid crypto-related risks.
• Dissent warns the stance could curb innovation and fair competition.

The U.S. Tenth Circuit Court of Appeals ruled in favor of the Federal Reserve, rejecting Custodia Bank’s bid for a master account that would grant direct access to the central bank’s payment system.

The 2-to-1 decision is a setback for the Wyoming-based digital-asset bank and reinforces the Fed’s authority to restrict access when it perceives systemic risk

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