A U.S. judge has sided with the Federal Reserve in a legal battle with Custodia Bank, concerning the bank's request for membership and a master account.

Custodia, a digital asset bank, had initiated legal action against the Fed in 2022, citing undue delays in the decision-making process regarding its master account application.

However, the court's decision effectively denies Custodia Bank's efforts to secure this crucial banking infrastructure.

The Federal Reserve had previously declined the bank's application for membership and a master account, underlining the complexities faced by digital asset banks in integrating with traditional banking systems.