Although more and more countries are changing the world of cryptocurrencies embrace, there are also governments that only seem to slow the turnout. The US hasn’t been mocking for years exchange traded fund (ETF), or listed fund, for bitcoin (BTC) and the new crypto bill also has negative sides. Bitcoin bank Custodia has had enough, and is now suing the Federal Reserve, the US central bank, because it believes it is not being treated fairly.
Bridge between fiat and crypto
That writes Forbes based on documents submitted by the company. Custodia, formerly Avanti, aims to bridge the gap between the crypto world and ‘TradFi’ (traditional finance). As the name suggests, the role of custodian for Custodia is an important part of the company. Custodia’s bitcoins will have to fulfill various roles, including that of collateral for other activities.
After the crash of the Terra (LUNA) ecosystem, governments are even less eager for these types of constructions than before. Bitcoins as collateral can create difficulties in times of crisis, because it is so volatile. Governments believe this could threaten financial stability. This will no doubt be a major reason for the delay.
Lawsuit against central bank
But to fulfill this role, Custodia needs an account with the central bank itself. This is a so-called ‘master account’. He already applied for it in October of 2020, but it has still not been approved. Custodia has sued the Federal Reserve bank of the city of Kansas for taking too long. Not even the Federal Reserve would have the right to delay this that long.
If Custodia has its way, it would be the first bank of its kind to have such an account. It would have executed the request nicely. Therefore, even under the US Constitution and its own policies, the central bank should not defer or refuse such an account. Fortunately, the infamous new bill would do a lot of good for such a master account. Custodia belongs to Caitlin Long, she helped with the bill.
