Today in crypto, a US federal appeals court knocks back Custodia Bank’s request to review the Federal Reserve’s authority in granting master accounts, the Ethereum foundation outlines how it will balance core values with ecosystem development, while Hong Kong is set to issue its first stablecoin issuer licenses, with HSBC and Standard Chartered likely among a “very small number” of initially approved issuers.
Federal court ends Custodia Bank's legal bid for a master account
A US federal court has rejected Custodia Bank’s final attempt to challenge the Federal Reserve’s authority over granting master accounts — effectively ending the crypto-focused bank’s five-year-long battle for direct access to the central bank’s payment system.
The US Court of Appeals for the Tenth Circuit said in a filing on Friday that it wouldn’t hear Custodia's final appeal on that point in a 7-3 vote.
Custodia first applied for a master account in October 2020, which allows financial institutions to hold reserves directly at the Federal Reserve and access its payment rails, enabling them to settle transactions without relying on intermediary banks.
After the Fed rejected its master account application, Custodia turned to the courts, arguing the Monetary Control Act entitles state-chartered banks to access Fed services and therefore a master account.
However, the multiple courts have now ruled that the Fed retains discretion over whether to grant master accounts.
Custodia’s blow comes as Kraken became the first crypto platform to receive a master account from the Federal Reserve Bank of Kansas City on March 4.
Ethereum Foundation outlines new mandate for its role
The Ethereum Foundation published a new document outlining its role in the ecosystem and its long-term priorities, as the Ethereum network faces growing questions about decentralization and scaling.
According to the mandate, the foundation will focus on protecting Ethereum’s core values, including censorship resistance, privacy and open-source development, rather than acting like a traditional tech company chasing growth or product metrics.
The foundation also said its goal is to make itself less necessary over time. It described a “walkaway test,” meaning the Ethereum network should eventually be strong enough to operate even if the foundation disappeared.
The announcement follows recent comments from Ethereum co-founder Vitalik Buterin about the network’s long-term direction, including concerns that Ethereum could become too dependent on layer-2 networks and the need to preserve principles like decentralization and censorship resistance.
HSBC, StanChart tipped for first Hong Kong stablecoin licenses
HSBC Holdings and a joint venture led by Standard Chartered are reportedly set to become the first authorized stablecoin issuers in Hong Kong.
The Hong Kong Monetary Authority (HKMA) is expected to issue stablecoin licenses to HSBC and Standard Chartered, the South China Morning Post reported Thursday, citing people familiar with the matter. HSBC and Standard Chartered are set to be in the first batch as authorities reportedly prioritize institutions already authorized to issue banknotes in the city.
The Hong Kong government, through the HKMA, authorizes banknote issuance to three commercial banks, including local branches of HSBC, Standard Chartered and the Bank of China.
The Hong Kong Monetary Authority has not confirmed the names of any successful applicants. Standard Chartered declined to comment, and HSBC did not immediately respond to a request for comment.
The approvals would mark a major step toward Hong Kong’s ambition to become a global digital asset hub despite neighboring mainland China reportedly making it harder to launch stablecoins in the region.
According to the SCMP, the number of licenses and timetable had yet to be finalized and remained subject to change, but the sources indicated a possible date on March 24.
