The Federal Reserve Board (Federal Reserve) rejected a request from Custodia Bank, a digital money bank, to carefully consider its membership application to the Fed's conference system software, while a regional court allowed the litigation between the two parties to proceed smoothly.

The central bank rejected the addition on February 23, stressing that the Federal Reserve Board had previously determined that Kustodina's application was "inconsistent with the elements required by national law."

In January of this year, the Federal Reserve meeting rejected a member of Casstodina's application, about four years after it filed in 2019. The shareholders' meeting standard allows the applicant to carefully consider the determination of the team members.

When rejected, the Fed meeting declared that Custodia's regulatory framework was "not enough".

It also cited a joint declaration issued with the Federal Deposit Insurance Corporation and the Office of the Superintendent of Monetary Engineering, which declared that digital currencies were "inconsistent with safe and stable banking practices".

The Custodia says it expects to add the Fed's meeting management system so that it can be tightly regulated by the requirements of traditional banks and open the way for many data encryption banks that expect to be maintained at the same higher standards.

Cointelegraph contacted Custodia, which declined to comment.

The lawsuit is drawing to a close.

Earlier this week, on Feb. 22, a presiding judge of the Wyoming Regional Court rejected a resolution by the shareholders' meeting of the Federal Reserve to reject a lawsuit mentioned by Custodia, which involved a four-year delay in one of the Fed's main accounts.

The main account will allow Custodia to browse the Fed's payment platform without using a third-party bank. Four years after Custodia applied for the main account in October 2020, the Fed meeting rejected the application on January 27th.

The Fed meeting then took action to dismiss the case, which became increasingly worthless because of the denial of the account. But Custodia filed a proposed revised complaint on February 17th, accusing the Fed of unfairly singling out and rejecting its application as part of a "centralized and coordinated" effort with President Joe Ban Ki-moon's government, while asking the court to overturn the decision.

In an announcement on Feb. 17, Custodia spokesman Nathan Steiger said the complaint "goes straight to the key legal risk: whether Congress has granted administrative enforcement procedures to the Fed meeting to determine the main account." He added that the Fed meeting "drove" the data encryption bank to "do everything it can to find an effective way forward".

The presiding judge has ordered Custodia to submit the first revised indictment to the court before March 1.