Washington, D.C. (Jan. 22, 2024) – On Friday, Jan. 19, Blockchain Association filed an amicus brief in Custodia v. Federal Reserve, in support of the Plaintiff’s motion for summary judgment. The brief focuses on why the Federal Reserve’s continued refusal to grant Custodia a master account for banking services undermines the balance between the state and federal dual banking system.
By denying Custodia’s application for access to federal banking services, the Federal Reserve threatens original Congressional intent to establish and maintain America’s dual banking system. Wyoming developed its Special Purpose Depository Institution (SPDI) to “focus on digital assets, such as virtual currencies, digital securities and digital consumer assets,” giving homegrown entrepreneurs a framework to embrace this technology and financial products. By stopping Custodia from accessing federal services, the Federal Reserve attempts to usurp local power, undercutting the state banking system’s ability to lead innovation in how Americans move, use, and manage their money.
The following statement is attributed to Blockchain Association Head of Legal Marisa Coppel:
“State banking systems have historically led innovation in American banking products. The country’s dual banking system – a balance between state and federal financial regulation – is crucial to protecting such innovation. But, the actions of the Federal Reserve against the digital asset ecosystem have threatened to upend this balance. We support Custodia’s position in their case against the Federal Reserve, particularly at a moment when consumers want additional avenues to own and invest with digital assets, not fewer.”