{"id":21484,"date":"2023-02-23T17:17:27","date_gmt":"2023-02-24T01:17:27","guid":{"rendered":"https:\/\/coinnetworknews.com\/us-federal-reserve-denies-custodia-banks-request-for-fed-supervision\/"},"modified":"2023-02-23T17:17:27","modified_gmt":"2023-02-24T01:17:27","slug":"us-federal-reserve-denies-custodia-banks-request-for-fed-supervision","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/us-federal-reserve-denies-custodia-banks-request-for-fed-supervision\/","title":{"rendered":"US Federal Reserve denies Custodia Bank’s request for Fed supervision"},"content":{"rendered":"

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The United States Federal Reserve has denied a request from cryptocurrency bank Custodia Bank to reconsider its membership application to the Federal Reserve System.<\/p>\n

The Fed announced<\/a> its denial on Feb. 23 saying the Federal Reserve Board previously decided that Custodia\u2019s application \u201cwas inconsistent with the required factors under the law.\u201d<\/p>\n

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@federalreserve<\/a> announces it has denied the request by Custodia Bank, Inc., for reconsideration of the Board\u2019s decision last month on its application to be supervised by the Federal Reserve: https:\/\/t.co\/ZYNUEoLeN1<\/a><\/p>\n

\u2014 Federal Reserve (@federalreserve) February 23, 2023<\/a><\/p><\/blockquote>\n

In January, the Fed rejected Custodia\u2019s application<\/a> to become a member. Board rules allow applicants to request a reconsideration of membership decisions.<\/p>\n

At the time of the initial rejection, the Fed claimed Custodia had an \u201cinsufficient\u201d management framework.<\/p>\n

Related: <\/em><\/strong>IMF exec board endorses crypto policy framework, including no crypto as legal tender<\/em><\/strong><\/a><\/p>\n

It also cited a joint declaration it made<\/a> alongside the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) that claimed cryptocurrencies were \u201cinconsistent with safe and sound banking practices.\u201d <\/p>\n

Custodia has said<\/a> it wishes to join the Federal Reserve System so it can be regulated under the standards that apply to traditional banks and open a path for other crypto-banks that wish to be held to those same heightened standards.<\/p>\n