The Digital Chamber announced its filing of an amicus brief in the case of Custodia Bank, Inc. v. Federal Reserve Board of Governors, stating that they filed "to advocate for the fair treatment of state-chartered financial institutions, particularly those integrating digital assets with traditional banking systems." The announcement came in a July 8 blog post.
According to the July 8 blog post from The Digital Chamber, the case is currently before the 10th Circuit Court of Appeals and challenges the Federal Reserve Bank of Kansas City’s decision to deny Custodia Bank’s application for a Federal Reserve Master Account. The organization writes that it filed the amicus brief "to advocate for the fair treatment of state-chartered financial institutions, particularly those integrating digital assets with traditional banking systems."
The Federal Reserve explains that a master account allows a reserve bank to receive deposits for a bank or credit union. The U.S. Federal Reserve has set guidelines that Reserve Banks use to determine who will have access. First, the institution requesting this type of account must be legally eligible for access to Reserve Bank accounts and services. Then the Reserve Bank considers whether "the institution’s access could pose (1) credit, operations, settlement, cyber or other risks to the Reserve Bank; (2) credit, liquidity, operational, settlement, cyber or other risks to the overall payment system; (3) risk to the stability of the U.S. financial system; (4) risk to the overall economy; and (5) effect on the Federal Reserve's ability to implement monetary policy," according to the Federal Reserve’s Master Account and Services Database FAQs website.
The Digital Chamber lays out its arguments in the amicus brief, including that clear statutory interpretation that "respects the mandatory language of 12 U.S.C. §248a(c)(2), which requires Federal Reserve services to be available to nonmember depository institutions" is necessary. The brief also emphasizes how important maintaining the balance of state and federal authority in banking regulations is and highlights the constitutional requirement for political accountability.
The Digital Chamber is an organization that promotes acceptance and use of digital assets and blockchain-based technologies through education and advocacy. The organization aims to develop an environment that fosters innovation, jobs, and investment, according to The Digital Chamber’s About page.
