An appeals court ruling last week declaring that Custodia is not entitled to a Federal Reserve mast account is not the end of the road for crypto banks to get access to the central bank, said a TD Cowen analyst on Monday.
“We see this as a speed bump rather than a road block for crypto Master Accounts,” said TD Cowen’s Washington Research Group, led by Jaret Seiberg, in a note.
“We view this as a temporary setback for what over time will be the merging of traditional finance with crypto,” Seiberg added. “The Trump administration and its regulators back the merging of these sectors. It is hard to see how it does not happen.”
On Oct. 31, the U.S. Court of Appeals for the Tenth Circuit certified a previous decision made by a district court in Wyoming that said the Federal Reserve does not have to give Custodia access to a master account and that the central bank has discretion over who is or isn’t granted access.
A master account allows institutions direct access to the Fed’s payment systems and provides the most direct access to the United States’ money supply available to financial institutions.
The most likely route for crypto is what Federal Reserve Governor Christopher Waller called “skinny master account,” Seiberg said. Waller proposed the idea last month for the limited account and said it would provide access to the central bank’s “payment rails while controlling for various risks to the Federal Reserve and the payment system.”
“The limited nature of the accounts would give the Federal Reserve more leeway to approve institutions even though only entities eligible for full Master Accounts could get skinny Master Accounts,” Seiberg said on Monday. “We expect a proposal in the coming months to establish these skinny Master Accounts.”
The Fed, though, is unlikely to reconsider the parameters for issuing master accounts and will still be cautious, Seiberg added.
Other crypto firms are also vying to get a national trust bank charter through the Office of the Comptroller of the Currency. The list includes Crypto.com, Coinbase, Bridge, Paxos, Ripple, Circle, and BitGo.
“We also believe the door is open to crypto-related entities obtaining national bank trust charters. Crypto firms already are pursuing this option,” Seiberg said. “We expect Comptroller Jonathan Gould will be supportive despite pushback from the banking sector.”
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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