The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve, arguing the central bank should not have the broad power to deny payment system access to eligible state-chartered banks.

In the amicus brief filed on Wednesday supportingCustodia’s petition, the crypto trade group said a lower court ruling in favor of the Fed gives federal regulators a quiet way to cut lawful businesses out of the banking system.

"The decision ratifies the Fed’s misuse of its payment services to further an impermissible policy goal—debanking the digital-asset industry,” the Blockchain Association wrote.

An amicus brief is a legal filing from someone who is not a party to a case but wants to give the court additional arguments or context. Here, the Blockchain Association is supporting Custodia’s request that the Supreme Court review the dispute.

At issue is Custodia’s bid for a Federal Reserve “master account.” Custodia is a so-called crypto bank based in Wyoming, offering services including digital-asset custody, payments and settlement infrastructure, and dollar-backed stablecoin-related products to institutional clients. It has spent years seeking a master account, which would allow it to settle payments directly with the central bank. In October, an appeals panel ruled that eligibility alone did not entitle Custodia to an account. In December, the bank asked the full Tenth Circuit to rehear the case.

The Blockchain Association argues the Fed’s denial threatens the dual banking system, where both state and federal authorities can charter banks. If the ruling stands, the association says, federal regulators could override state banking decisions by denying access to the payments system.

“Whether federal regulators, based on their own discretionary whims, can intrude on state prerogatives and debank lawful businesses is a question of exceptional importance with broad consequences for the national economy,” they wrote.

The brief said Custodia’s fight is the latest phase of Operation Choke Point 2.0, invoking the Obama and Biden-era program critics said pressured banks to cut ties with unfavorable industries.

“In a well-documented campaign termed Operation Choke Point 2.0, the federal government under the prior administration ‘used vague rules, excessive discretion, informal guidance, and aggressive enforcement actions to pressure banks away from serving digital asset clients’ and engaging with digital assets,” the brief said.

While the Supreme Court has not agreed to hear the case, for now, the brief asks the justices to decide how much control the Fed should have over access to the U.S. payments system.