Custodia Bank Faces Setback as Appeal Over Fed Master Accounts Denied

The U.S. Court of Appeals for the 10th Circuit has declined to hear Custodia Bank's final appeal regarding the Federal Reserve's control of master accounts, with a 7-3 vote. According to NS3.AI, this decision leaves Custodia Bank without direct access to the Fed's payment rails after years of legal battles. Meanwhile, the Federal Reserve Bank of Kansas City has granted Kraken's banking arm a limited account that includes several master-account features. Additionally, the Federal Reserve Board is in the process of developing an early-stage policy for similar "skinny" accounts, although the timeline for implementation remains uncertain.