Court Affirms Fed Master-Account Discretion as Congress Tackles De-Banking and Market Structure Legislation

Even amid the historic government shutdown, crypto policy continues to evolve, with courts, Congress and regulators moving forward on major issues. The U.S. Court of Appeals for the 10th Circuit affirmed that Federal Reserve banks have discretion to deny master account access based on risk, an outcome with implications for crypto-focused banks seeking direct Fed services. On the Hill, Sen. Thom Tillis (R-NC) released a discussion draft aimed at curbing politically motivated “de-banking,” while the Senate Agriculture Committee continued its bipartisan work on digital asset market structure legislation despite the shutdown. At the agencies, SEC Chair Paul Atkins noted ongoing coordination with the Department of Labor on access to alternative assets in 401(k) plans amid reduced staffing, and the U.S. Financial Accounting Standards Board added a research project on whether certain digital assets should be treated as cash equivalents.

Congressional Updates

Senator Tillis Introduces Discussion Draft on Legislation to Ban Politically Motivated De-Banking

• On Oct. 30, Sen. Thom Tillis (R-NC) introduced a discussion draft of legislation titled “Ensuring Fair Access to Banking,” along with a section-by-section summary, that seeks to prevent the denial of banking services for politically motivated reasons. The legislation aims to guard against both regulator- and financial institution-initiated de-banking by establishing a federal fair access standard, an enforcement mechanism and reforms to the examination and supervision process.
• Additionally, the bill establishes an inspector general within the Treasury, tasked with reviewing and reporting instances of financial regulator overreach during the supervisory, regulatory or examination processes.
• The bill also raises the Currency Transaction Report (CTR) threshold to $45,000 and the relevant Suspicious Activity Report (SAR) thresholds to $4,000 and $10,000, and provides for an annual adjustments mechanism based on inflation.

Senators Discuss Market Structure Legislation Amid Shutdown

• On Oct. 30, it was reported that bipartisan discussions on crypto legislation have continued amid the government shutdown. Although the Senate Agriculture Committee has yet to release its portion of the Senate market structure legislation, Committee Chairman John Boozman (R-AK) is working daily with committee member Sen. Cory Booker (D-NJ) to finalize the same. The plan is to release a bipartisan proposal soon, teasing a possible committee vote on their portion before Thanksgiving.
• On Sept. 5, Senate Banking Committee Republicans released an updated discussion draft of the “Responsible Financial Innovation Act of 2025,” focused on the Committee’s portion of the market structure legislation that concentrates on the SEC’s jurisdiction over the regulation of digital assets. The draft is covered in more detail here.

Regulatory Agency Updates

10th Circuit Affirms Decision on Fed Discretion to Provide Master Account Access

• On Oct. 31, the U.S Court of Appeals for the 10th Circuit upheld a District Court’s ruling that the Federal Reserve has discretion to reject master account applications.
• The plaintiff bank, a Wyoming-chartered special purpose depository institution, was not a member of the Federal Reserve and requested a master account with the Federal Reserve Bank of Kansas City. Despite agreeing the plaintiff bank was statutorily eligible for an account, the Federal Reserve Bank of Kansas City denied the request because it determined the plaintiff bank’s crypto-focused business model would introduce undue risk into the Fed’s payment systems and services. The plaintiff bank brought an action against the Federal Reserve Bank of Kansas City and the Board of Governors of the Federal Reserve System to compel the issuance of a master account, arguing that the Federal Reserve lacked discretion as to who gets access to Fed accounts and services. The 10th Circuit, like the District Court before it, concluded that the plain language of the relevant statutes grants Federal Reserve Banks discretion to reject master account access requests from eligible entities and therefore rejected the bank’s demand for a master account.

SEC Chair Atkins Discusses Progress on Alternative Assets in 401(k)s During Government Shutdown

• On Oct. 31, in a CNBC interview, SEC Chairman Paul Atkins stated the agency is continuing to work with the Department of Labor regarding Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors,” although it has not been able to make much progress during the shutdown. The Executive Order seeks to facilitate access to alternative assets, including digital assets along with the private markets. According to Atkins, only 10% of the agency’s workforce is currently working amid the shutdown.

SEC Issues Exemptive Order Regarding Compliance With Certain Rules Under Regulation NMS

• On Oct. 31, the SEC issued an exemptive order granting temporary exemptive relief from certain compliance dates adopted under Regulation NMS: Minimum Pricing Increments, Access Fees and Transparency of Better Priced Orders. The temporary exemptive relief was issued by the SEC in light of concerns about market participants’ ability to comply with certain amendments by Nov. 3, 2025, during the lapse in appropriations. The delay helps ensure orderly market operations and gives additional time for firms — including those developing tokenized securities and digital asset platforms — to come into compliance.

FASB to Research Stablecoin Guidance

• On Oct. 29, the U.S. Financial Accounting Standards Board added a project to its technical agenda to clarify whether certain digital assets may be classified as cash equivalents. The research project will explore targeted improvements to the accounting for and disclosure of certain digital assets and related transactions, including the accounting for certain digital asset transfers, such as crypto lending.