Custodia bank founded by Caitlin Long,
An early advocate of Bitcoin (BTC) who established the institution in 2020
Formerly, this bank known as Avanti
One of the first Special Purpose Depository Institutions (SPDIs)
Also known as “blockchain banks” made under a Wyoming regulatory framework.
This bank aims to provide accounts for crypto companies
And they will serve as a bridge for them to the U.S. dollar payment system.
Custodia submitted an application for a Federal Reserve master account 19 months ago
Specifically, in October 2020.
Then, the account will allow Custodia to access the Federal Reserves payment systems
Obviously, without using a third party bank.
Custodia wants to compel the Federal Reserve Board
And its Kansas City branch to approve its application for a Fed master account within 30 days.
The digital asset bank Custodia is suing the Federal Reserve Board of Governors
While the Federal Reserve Bank of Kansas City, claiming an “unlawful delay”
In processing an application for its master account.
Nathan Miller a spokesperson for Custodia Bank said:
“Through this lawsuit, Custodia seeks to ensure that its Federal Reserve master account application receives the fair dealing and due process guaranteed to it by both federal statute and the U.S. Constitution. Custodia has satisfied every rule applicable to it, and has gone beyond by applying to become a Fed member bank.”
The suit claims the Federal Reserve violated a United Stated Code
Which outlines a one-year deadline for processing the application
And says that it even states on the master account application that a decision takes five to seven business days.
Previously, The Fed’s Kansas City bank ready to approve the account
Before the Federal Reserve Board asserted control over the process in spring 2021
Which “derailed” the application, Custodia says.
The delay has postponed Custodia’s full entry to the market
Moreover, it forces the bank to partner with another bank that already has a master account.
It says this is a “makeshift solution” that is “second best and far more expensive”.
- More to read: 2 More Spots Crypto ETFs In Australian Markets