Custodia Bank, a financial services provider that’s focused on the Bitcoin (BTC) and digital assets ecosystem, has shared a key update.
Unlike other Bitcoin custodians, Custodia Bank notes that it “uses a segregated custody model that allows you to validate your address balances on-chain.”
As explained in the update from the digital assets focused banking platform, Custodia’s Bitcoin custody setup allows clients “to manage their individual UTXOs.”
Currently, clients are able to “select which UTXOs they want to protect.”
Custodia Bank further reveals they are “working on a full set of Bitcoin UTXO management features, making UTXO hygiene even easier.”
This is especially useful in high fee environments and “for smaller UTXOs (eg, mining rewards as part of a pool payout).”
The update also mentioned that “between the halving and Runes launch, Bitcoin network fees are back to all time highs and it’s critical to have a strategy to manage your #UTXOs and reduce fee expenditure.”
As covered, Wyoming-based digital asset bank Custodia will continue its efforts to obtain access to a Federal Reserve master account. Wyoming is a digital asset-friendly jurisdiction.
A Federal Reserve master account is an account in which a Reserve Bank allows banks or credit unions to use the account to receive deposits. It also provides electronic funds transfers and check payments.
As was recently reported, Custodia was denied in US District Court in its effort to gain access to a master account. The court decided the Fed could choose which banks had access. Custodia filed the lawsuit in 2022.
Key figures in the crypto and blockchain space are calling for Custodia Bank to appeal the Judge’s decision on the matter.
Custodia Bank has been dealing with legal issues while fighting the Federal Reserve for a couple of years now and is expected to appeal the decision, according to a recent update shared by FOX Business News.
Custodia, which is notably one of four crypto-focused banks in the state of Wyoming, told FOX Business it thinks the judge’s decision was not the right one to make, and it’s looking into all of its options, which may potentially include an appeal.
Custodia CEO Caitlin Long told the news media outlet that:
“We find ourselves on the frontlines of the war against de-banking. Judges have concluded the Federal Reserve is more powerful than one of the U.S. states.”
While Custodia seeks to gain a master account, the move is unpopular with establishment banks.
In 2023, the Independent Community Bankers Association (ICBA) issued the following statement when the request was first denied.
“The denial of Custodia Bank’s application to become a member of the Federal Reserve System, the Fed’s policy statement clarifying that its regulatory limitations apply to both insured and uninsured depository institutions, and the White House’s statement on crypto-assets and stablecoins appropriately reflect the risks posed by special-purpose depository institutions and digital assets.”
The ICBA added:
“As Washington considers the risks and potential policy response to digital assets, ICBA reminds policymakers that the nation’s community bankers are rightly concerned about the privacy, cybersecurity, and systemic risks posed by cryptocurrency. Policymakers should prioritize protecting national security amid ongoing instability in the crypto markets while collaborating on a comprehensive regulatory framework that utilizes more effective alternatives to a U.S. central bank digital currency — including the FedNow instant payments service.”
