Custodia Bank and Vantage Bank Issue America's First Bank-Issued Stablecoin On A Permissionless Blockchain

First-ever tokenization of a U.S. bank's demand deposits on a permissionless blockchain

CHEYENNE, Wyo., March 25, 2025 /PRNewswire/ -- Custodia Bank, working with Vantage Bank, yesterday completed America's first-ever tokenization of a bank's U.S. dollar demand deposits on a permissionless blockchain by issuing, transferring and redeeming Avit^™ stablecoins for a bank customer. A new U.S. dollar payment rail has now been activated inside the U.S. banking system, at a time when the global community is increasingly demanding U.S. dollar stablecoins for transactional use.

All parties to the series of test transactions observed several efficiencies, including low transaction costs, fast transaction settlement, programmability and auditability within a safe, compliant and regulated banking environment.

The banks collaborated on the mint, transfer and redemption of Avit tokens for a bank customer on the Ethereum mainnet using the ERC-20 standard. Parties transacted in eight stages, with Vantage Bank managing the stablecoin fiat reserves and providing Fedwire/ACH services. Custodia Bank managed blockchain issuance/redemption services, custody services, blockchain transaction monitoring and reconciliation using its Avit Management System. The eight stages included transfers by the bank customer of its Avit tokens into self-custody, transacting with its Avit tokens business-to-business outside the banking system, and transferring its Avit tokens back to Custodia Bank for redemption into U.S. dollar demand deposits.

The banks complied with all applicable U.S. bank regulatory requirements, including BSA/AML/OFAC, which necessitated designing documentation, policies and procedures that differ from those of current stablecoin issuers. Both banks worked closely with their respective bank regulators to ensure the success of this first-of-its-kind project.

"We broke ground on the legal/regulatory front, proving that U.S. banks can collaborate to tokenize demand deposits on a permissionless blockchain in a regulatorily-compliant manner," said Caitlin Long, CEO of Custodia Bank. "Custodia looks forward to the reversal of U.S. regulatory obstacles that have stymied stablecoin innovation in recent years, so that American consumers can benefit from the substantial network effects and global reach of permissionless blockchain technologies."

Jeff Sinnott, President and CEO of Vantage Bank said, "This event marks a pivotal moment in reshaping the financial landscape, demonstrating how blockchain and stablecoins can revolutionize payments. By executing this transaction, we're empowering banks to lead responsibly in cross-border modernization, while also leveraging the strength of the U.S. Dollar and demonstrating regulators' support for responsible innovation."

The transactions deployed Custodia's patent, U.S. patent 11392906 (issued July 2022), for the tokenization of U.S. dollar bank deposits on smart-contract type permissionless blockchains.

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Avit^™ is a trademark of Custodia Bank, Inc.

About Custodia: Custodia Bank, Inc. is a Wyoming bank formed to serve as a compliant bridge to the U.S. dollar payments system and a custodian of digital assets that can meet the strictest level of institutional custody standards. Custodia is required to fully comply with all applicable laws and regulations, including the Bank Secrecy Act and federal "know your customer," anti-money laundering and related laws and regulations. Custodia also complies with Wyoming's special purpose depository institution and digital asset laws, which include requirements that fiat deposits be 100% reserved and that Custodia meet the strictest investor protections in the digital asset industry. In 2022, the Federal Reserve deemed Custodia a depository institution eligible to maintain a Federal Reserve master account. This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.

About Vantage Bank: Vantage Bank is prepared for what's possible! We are dedicated to delivering sophisticated, innovative financial solutions while maintaining a strong commitment to the communities we serve. Headquartered in Texas, we operate across the state, with locations in Dallas, El Paso, Fort Worth, Houston, Laredo, the Rio Grande Valley, and San Antonio. Our suite of powerful digital tools and services rivals those offered by fintechs and similar non-bank financial services companies. We operate within a safe and sound environment—providing peace of mind and the financial security that only a regulated institution can offer. By integrating advanced technology with personalized service, Vantage Bank empowers individuals and businesses to achieve their financial goals while upholding the highest standards of compliance and community engagement.

SOURCE Vantage Bank