Here’s the big reveal: Custodia Bank and Kraken Financial are basically the only crypto companies in the spotlight with full bank charters. And guess what? This puts them in a prime position to snag those oh-so-coveted Federal Reserve master accounts. Talk about making it to the VIP section!

But let’s not get ahead of ourselves. Custodia Bank’s CEO, Caitlin Long, took to X to break it down in simple terms. She explained the hierarchy of access in crypto-land:

“In terms of tiers, a master account is Diamond, bank is Platinum, trust companies are Gold & money transmitter licenses are Silver.”

So, yeah, if you’re wondering, there’s a huge gap between “trust” and “bank,” and only Custodia and Kraken are sitting at the top table. The rest of the crypto world? Still fighting for a spot at the kiddie table with trusts and money transmitter licenses.

Ripple and the New Wave of Applications for Fed Access

Here’s where it gets interesting: A master account gives an institution direct access to the Fed’s payment system. While traditional banks are basically born with this privilege, crypto firms? Not so much. They've been shut out for years. And right now, Custodia Bank is in a lawsuit with the Fed, trying to change that. A decision is coming soon, so I guess we’ll all be on edge to see who gets the golden ticket.

Now, if you think Ripple’s just going to sit back and relax, think again. They’re also trying to climb that ladder. Ripple applied for a Fed master account through Standard Custody, the trust company it bought in 2023. But here’s the catch: A court ruling in 2024 slapped down the idea that even state-chartered banks are guaranteed a Fed account. The decision pointed to concerns like systemic risk and regulatory shenanigans. Yikes.

Even with all this uncertainty, a wave of new applications is giving hope to crypto firms. WisdomTree Digital Trust, Standard Custody, and Commercium Financial are jumping into the fray, hoping for a miracle.

But I have a feeling these companies know something we don’t, especially considering the speculation that the Trump administration might issue an executive order to force the Fed to open its doors to crypto. Sounds like a plot twist in a crypto thriller, right?

And as if that weren’t enough, the crypto lobby is stepping up its political game. After dropping $136 million to help elect pro-crypto candidates in 2024, super PACs like Fairshake and Protect Progress are at it again in 2025. They’ve got their sights set on influencing Congress, which is currently considering bills like the GENIUS and CLARITY Acts to bring some regulatory clarity to the crypto world.

So, what’s the big takeaway here? Fed access is the next battleground for crypto, and with Kraken and Custodia holding the “Diamond” keys, the rest of the industry is scrambling for their own path to legitimacy. Some are banking on trust charters, others are calling in legal reinforcements, and then there’s the political muscle that’s sure to make things even more interesting.

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