There has been a 19-month wait in applying for a Master account, according to Custodia.
Digital banks face a slew of bureaucratic hurdles when asking for operating licences, but the Bitcoin Bank Custodia chose to take matters to court.
Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City have been accused of unlawfully delaying Caitlin Long’s Bitcoin Bank Custodia’s request to create a master account, which would have allowed the bank to function legally in the United States. For the second time in the US, Caitlin Long is the creator of Avanti Financial Group, a crypto bank that is licenced to operate.
Custodia is claiming that the FED is breaking its own rules since, according to their own words, the production of the document sought by the bank “typically takes [five to seven] working days.” They have, however, managed to postpone its release.
Delays of more than 19 months
While other banks might have received the document within a week, Custodia has had to wait 19 months to get their hands on it.
So, the Fed “obviously exceeded the [one]-year statutory timeframe for doing so,” according to the bank’s assessment. A routing number granted by American Bankers Association (ABA), which is only offered to financial institutions authorised to create a master account, was even mentioned.
On top of that, Custodia says that the Fed is delaying its applications for the benefit of legacy banking firms “whose interests are represented on the Kansas City Fed’s Board of Directors.”
Having direct access to the Fed without the need for intermediate institutions would be of critical value to the bank, allowing it to simplify its operations by providing a safe bridge between digital assets and the U.S. dollar payment system.