Crypto Bank Custodia Loses Fed Battle as Others Get Access

A crypto-friendly bank just lost its years-long legal battle with America's central bank — but the timing couldn't be more ironic.

Custodia Bank has been fighting the Federal Reserve (America's central bank that controls the money supply) for access to something called a "master account." Think of a master account like having a direct bank account with the Fed — it lets banks move money without needing other banks as middlemen.

On Friday, a federal court voted 7-3 to reject Custodia's final appeal. The Wyoming-based crypto bank wanted to challenge the Fed's power to decide who gets these special accounts.

Here's why this matters: • Master accounts let banks access the Fed's payment systems directly • This makes transferring money faster and cheaper • Crypto banks desperately want this access to compete with traditional banks

The ironic twist: Just days before this rejection, the Fed granted Kraken (a major crypto exchange) limited access to a master account. This suggests the Fed might be warming up to crypto companies — just not Custodia.

The Fed is also working on a nationwide policy for granting limited master accounts, which could open doors for other crypto firms in the future.

Bottom line: While Custodia lost this battle, the war for crypto companies to access traditional banking infrastructure continues. The Fed's willingness to work with Kraken shows progress, even as it shuts the door on Custodia.

This is an AI-generated summary. Read the original article at: https://www.coindesk.com/policy/2026/03/13/court-closes-custodia-fight-with-federal-reserve-just-as-fed-opens-master-account-door