DENVER–A District Court’s ruling that Custodia, a special purpose depository institution specializing in cryptocurrency, is not entitled to a Federal Reserve master account has been upheld by the U.S. Court of Appeals for the Tenth Circuit.
The decision has the support of America’s Credit Union, which noted it has been advocating for “consistent and transparent guidelines” to inform the Federal Reserve’s discretionary review of eligible institutions that seek access to Reserve Bank accounts and services.
Specifically, America’s CUs noted is has been urging the Fed to ensure that non-federally insured institutions “meet the same safety and soundness standards applicable to insured institutions.”
The trade group added that while it has suggested the current system has worked well, “providers other than credit unions and banks will likely seek access, and some could rely on technologies that may pose unique risks to the payments system.”
Getting Skinny
As the CU Daily reported here, Federal Reserve Gov. Christopher Waller recently suggested so-called “skinny accounts” might be created that would provide an alternative for entities that are technically eligible to hold reserve accounts but operate with unique business models.
As both that report and America’s Credit Unions noted, the “skinny master account” outlined by Waller would not include the complete range of privileges associated with regular master accounts, including the payment of interest on reserve balances, and could be subject to limits on maximum balances.
