đ„Hot News! According to Fox Business, digital asset bank Custodia Bank has challenged the Federal Reserve's decision to deny it a master account and has filed a brief with the U.S. Court of Appeals for the Tenth Circuit. Custodia asked the court to revoke this decision and grant it a master account. đ©ââïž
Custodia's lawyers raised several key arguments. First, they believe that the Fed's power to deny state-chartered banks the power to open master accounts undermines the dual banking system, which allows banks to freely choose whether to operate under a state charter or a federal charter. đŠ
Second, they claim that the Fed's power to discriminate against state-chartered banks seeking to obtain master accounts may violate the Monetary Control Act. The Act allows state-chartered banks seeking to obtain Fed services to obtain fair access. âïž
Finally, they emphasized the word "shall" used by Congress in the Monetary Control Act to illustrate that Congress intended for all eligible banks to have equal access to the Fed's services. đïž
Custodia hopes to operate as an uninsured bank, issuing a stablecoin backed by cash and other assets. However, the Fed determined that the bank was not entitled to a master account at the Federal Reserve System and rejected its application to join the Federal Reserve System. This suggests that the Fed wants to isolate payment rails from crypto assets. đ°đ
This incident has once again sparked discussions about blockchain and cryptocurrency regulation. Let's wait and see how this legal battle plays out. đ
