The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve, arguing the central bank should not have the broad power to deny payment system access to eligible state-chartered banks.
Myriad: Will the Clarity Act be signed into law in 2026? Click to make your prediction."The decision ratifies the Fed’s misuse of its payment services to further an impermissible policy goal—debanking the digital-asset industry,” the Blockchain Association wrote.
The Blockchain Association argues the Fed’s denial threatens the dual banking system, where both state and federal authorities can charter banks. If the ruling stands, the association says, federal regulators could override state banking decisions by denying access to the payments system.
“Whether federal regulators, based on their own discretionary whims, can intrude on state prerogatives and debank lawful businesses is a question of exceptional importance with broad consequences for the national economy,” they wrote.
“In a well-documented campaign termed Operation Choke Point 2.0, the federal government under the prior administration ‘used vague rules, excessive discretion, informal guidance, and aggressive enforcement actions to pressure banks away from serving digital asset clients’ and engaging with digital assets,” the brief said.
While the Supreme Court has not agreed to hear the case, for now, the brief asks the justices to decide how much control the Fed should have over access to the U.S. payments system.
