Appeals court affirms ruling on cryptocurrency banks' Fed master account access

The U.S. Court of Appeals for the Tenth Circuit upheld the District Court’s ruling that Custodia, a special purpose depository institution specializing in cryptocurrency, is not entitled to a Federal Reserve master account.

America’s Credit Unions has advocated for consistent and transparent guidelines to inform the Federal Reserve's discretionary review of eligible institutions who seek access to Reserve Bank accounts and services, specifically urging the Fed to ensure that non-federally insured institutions meet the same safety and soundness standards applicable to insured institutions. 

The association has suggested that while the current system has worked well, providers other than credit unions and banks will likely seek access, and some could rely on technologies that may pose “unique risks” to the payments system. 
Recent comments from Federal Reserve Governor Christopher Waller have hinted at the creation of a “skinny master account,” which may provide an alternative for entities that are technically eligible to hold reserve accounts but operate with unique business models. However, the “skinny master account," as envisioned by Governor Waller, will not come with the complete range of privileges that are associated with regular master accounts, such as the payment of interest on reserve balances, and could be subject to limits on maximum balances.