Wyoming-based crypto bank Custodia Bank has filed a petition for a full panel review by the Tenth Circuit Court of Appeals against the Federal Reserve’s decision to deny its application for a master account. The bank argues that the original three-judge panel misinterpreted the Monetary Control Act, which grants eligible banks the right to open master accounts. Custodia contends that the ruling harms state banking regulators and raises significant constitutional issues. As an innovative crypto bank providing financial services for digital currencies, Custodia aims to integrate new technology into the traditional banking system. The Federal Reserve master account allows banks to transact directly with the central banking system, enhancing transparency and stability. Without this account, Custodia faces limitations in its financial operations, potentially affecting its participation in the crypto market. The dispute highlights the growing tension between financial institutions and regulators amid rising adoption of cryptocurrencies and digital assets, emphasizing the need to update banking laws to meet the digital era’s demands. A favorable ruling could mark a significant advancement for the crypto banking sector, while an adverse decision might pose additional challenges for crypto financial institutions. The outcome will be pivotal not only for Custodia Bank but for the entire crypto financial industry, clarifying the extent to which traditional financial regulations apply to crypto banking and shaping future rules for the sector’s development.
Source: binance
