The Wyoming-chartered bank, which provides financial services to cryptocurrency companies, sought access to the payment system in a 2020 application to the Federal Reserve Bank of Kansas City, but the Fed denied the application in 2023, citing concerns about business models concentrated in crypto-asset-related activities, according to the report.

The 10th Circuit Court of Appeals subsequently upheld the Fed's decision.

In its petition filed Friday, Custodia said the case raises an important question about whether regional Fed banks can override state bank chartering decisions by denying payment services, the report said.

The bank argued the case centers on whether regional Federal Reserve Bank presidents have unbounded discretion to deny master accounts to eligible banks, Bloomberg reported.

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