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Project Overview
Custodia is the first U.S. digital asset bank built on a modern core banking platform. It provides digital asset banking, custody, and payment solutions to business customers who are looking for enhanced regulatory clarity and minimized transactional risk as they explore the digital asset frontier.
Dallas Fed: Tokenized Deposits Could Reduce Bank Lending Capacity
Odaily News: The Federal Reserve Bank of Dallas (Dallas Fed) reported that tokenized deposits could allow customers to move funds more quickly in search of higher yields, potentially undermining bank funding stability. The bank estimates that a 10% increase in deposit rate sensitivity could reduce banks' interest rate risk-bearing capacity by approximately $700 billion.The report notes that tokenized deposits differ from stablecoins like USDT and USDC, as they are regulated, interest-bearing deposits. However, instant settlement, smart contracts, and AI could lower deposit stickiness. If demand deposits become easier to transfer rapidly between institutions, banks' willingness to hold long-term fixed-rate assets may decline.The bank also stated that if the weighted average maturity of deposits shortens by 10%, the banking system's maturity transformation capacity could decrease by $580 billion. Institutions including Custodia, Vantage, Barclays, BMO, and Swift have already tested or advanced projects related to tokenized deposits and 24/7 settlement. (Decrypt)
Blockchain Association Supports Custodia Bank's Application to Supreme Court for Federal Reserve Master Account Access
According to The Block, the Blockchain Association filed an amicus curiae brief on August 13 supporting Custodia Bank's appeal to the U.S. Supreme Court, requesting a review of the legality of the Federal Reserve Bank's refusal of its master account application. The Blockchain Association pointed out that this case concerns whether legitimate digital asset enterprises can compete in a fair environment, and warned that the lower court ruling provides a precedent for federal regulators "to debank unpopular industries in the future without the intervention of state regulators." Custodia Bank was founded by Wall Street veteran Caitlin Long, applied for a Fed master account in October 2020, was rejected by the Federal Reserve Bank of Kansas City in January 2023 on the grounds that the crypto business model posed risks, subsequently lost twice in the district court and the Tenth Circuit Court of Appeals, and was denied rehearing by the full court in a 7 to 3 vote in March 2026. The Federal Reserve Bank of Kansas City must respond to the Supreme Court application by September 11.
BlockchainAssn Files Amicus Brief Supporting Custodia, Urging Supreme Court to Review Federal Reserve Master Account Discretion
: Fox Business crypto reporter posted on X that BlockchainAssn, a crypto industry organization, has filed an amicus brief supporting Custodia Bank's petition to the U.S. Supreme Court, urging the Court to review whether regional Federal Reserve banks have the authority to deny eligible state-chartered banks access to master accounts. The organization warned that lower court rulings in favor of the Federal Reserve grant the central bank broad power to disqualify industries or companies it does not recognize from accessing banking services, effectively determining which state-chartered banks are permitted to operate. Meanwhile, the Federal Reserve Bank of Kansas City has been granted an extension until September 11 to respond to Custodia's petition.
Blockchain Association Supports Custodia v. Federal Reserve Case to Supreme Court
The Blockchain Association filed an amicus curiae brief with the Supreme Court supporting Custodia Bank's challenge to the Federal Reserve's decision to deny its master account application, with the dispute centering on whether the Federal Reserve has the authority to deny qualified state-chartered banks access to payment systems.
Blockchain Association Supports Custodia Bank's Application to Supreme Court for Federal Reserve Master Account Access
According to The Block, the Blockchain Association filed an amicus curiae brief on August 13 supporting Custodia Bank's appeal to the U.S. Supreme Court, requesting a review of the legality of the Federal Reserve Bank's refusal of its master account application. The Blockchain Association pointed out that this case concerns whether legitimate digital asset enterprises can compete in a fair environment, and warned that the lower court ruling provides a precedent for federal regulators "to debank unpopular industries in the future without the intervention of state regulators." Custodia Bank was founded by Wall Street veteran Caitlin Long, applied for a Fed master account in October 2020, was rejected by the Federal Reserve Bank of Kansas City in January 2023 on the grounds that the crypto business model posed risks, subsequently lost twice in the district court and the Tenth Circuit Court of Appeals, and was denied rehearing by the full court in a 7 to 3 vote in March 2026. The Federal Reserve Bank of Kansas City must respond to the Supreme Court application by September 11.
BlockchainAssn Files Amicus Brief Supporting Custodia, Urging Supreme Court to Review Federal Reserve Master Account Discretion
: Fox Business crypto reporter posted on X that BlockchainAssn, a crypto industry organization, has filed an amicus brief supporting Custodia Bank's petition to the U.S. Supreme Court, urging the Court to review whether regional Federal Reserve banks have the authority to deny eligible state-chartered banks access to master accounts. The organization warned that lower court rulings in favor of the Federal Reserve grant the central bank broad power to disqualify industries or companies it does not recognize from accessing banking services, effectively determining which state-chartered banks are permitted to operate. Meanwhile, the Federal Reserve Bank of Kansas City has been granted an extension until September 11 to respond to Custodia's petition.
Custodia files petition with US Supreme Court, advancing 6-year dispute over Federal Reserve master account
Odaily Odaily News: Custodia Bank has filed a petition for a writ of certiorari with the U.S. Supreme Court, seeking a ruling on whether a regional Federal Reserve Bank president has the authority to deny master account services to an institution. Custodia Bank had repeatedly applied for a Federal Reserve master account but was denied in 2023 by the Fed, citing significant safety and soundness risks associated with its novel business model and its planned primary focus on crypto assets. Custodia Bank subsequently appealed to the U.S. Court of Appeals for the Tenth Circuit, which ruled in favor of the Federal Reserve Bank of Kansas City in 2024. The U.S. Supreme Court is expected to decide in October whether to take up the case. (Bitcoin.com News).
Related news
Dallas Fed: Tokenized Deposits Could Reduce Bank Lending Capacity
Odaily News: The Federal Reserve Bank of Dallas (Dallas Fed) reported that tokenized deposits could allow customers to move funds more quickly in search of higher yields, potentially undermining bank funding stability. The bank estimates that a 10% increase in deposit rate sensitivity could reduce banks' interest rate risk-bearing capacity by approximately $700 billion.The report notes that tokenized deposits differ from stablecoins like USDT and USDC, as they are regulated, interest-bearing deposits. However, instant settlement, smart contracts, and AI could lower deposit stickiness. If demand deposits become easier to transfer rapidly between institutions, banks' willingness to hold long-term fixed-rate assets may decline.The bank also stated that if the weighted average maturity of deposits shortens by 10%, the banking system's maturity transformation capacity could decrease by $580 billion. Institutions including Custodia, Vantage, Barclays, BMO, and Swift have already tested or advanced projects related to tokenized deposits and 24/7 settlement. (Decrypt)
Blockchain Association Supports Custodia v. Federal Reserve Case to Supreme Court
The Blockchain Association filed an amicus curiae brief with the Supreme Court supporting Custodia Bank's challenge to the Federal Reserve's decision to deny its master account application, with the dispute centering on whether the Federal Reserve has the authority to deny qualified state-chartered banks access to payment systems.
Blockchain Association Supports Custodia Bank's Application to Supreme Court for Federal Reserve Master Account Access
According to The Block, the Blockchain Association filed an amicus curiae brief on August 13 supporting Custodia Bank's appeal to the U.S. Supreme Court, requesting a review of the legality of the Federal Reserve Bank's refusal of its master account application. The Blockchain Association pointed out that this case concerns whether legitimate digital asset enterprises can compete in a fair environment, and warned that the lower court ruling provides a precedent for federal regulators "to debank unpopular industries in the future without the intervention of state regulators." Custodia Bank was founded by Wall Street veteran Caitlin Long, applied for a Fed master account in October 2020, was rejected by the Federal Reserve Bank of Kansas City in January 2023 on the grounds that the crypto business model posed risks, subsequently lost twice in the district court and the Tenth Circuit Court of Appeals, and was denied rehearing by the full court in a 7 to 3 vote in March 2026. The Federal Reserve Bank of Kansas City must respond to the Supreme Court application by September 11.
BlockchainAssn Files Amicus Brief Supporting Custodia, Urging Supreme Court to Review Federal Reserve Master Account Discretion
: Fox Business crypto reporter posted on X that BlockchainAssn, a crypto industry organization, has filed an amicus brief supporting Custodia Bank's petition to the U.S. Supreme Court, urging the Court to review whether regional Federal Reserve banks have the authority to deny eligible state-chartered banks access to master accounts. The organization warned that lower court rulings in favor of the Federal Reserve grant the central bank broad power to disqualify industries or companies it does not recognize from accessing banking services, effectively determining which state-chartered banks are permitted to operate. Meanwhile, the Federal Reserve Bank of Kansas City has been granted an extension until September 11 to respond to Custodia's petition.
Custodia files petition with US Supreme Court, advancing 6-year dispute over Federal Reserve master account
Odaily Odaily News: Custodia Bank has filed a petition for a writ of certiorari with the U.S. Supreme Court, seeking a ruling on whether a regional Federal Reserve Bank president has the authority to deny master account services to an institution. Custodia Bank had repeatedly applied for a Federal Reserve master account but was denied in 2023 by the Fed, citing significant safety and soundness risks associated with its novel business model and its planned primary focus on crypto assets. Custodia Bank subsequently appealed to the U.S. Court of Appeals for the Tenth Circuit, which ruled in favor of the Federal Reserve Bank of Kansas City in 2024. The U.S. Supreme Court is expected to decide in October whether to take up the case. (Bitcoin.com News).