Custodia Bank Pushes Tokenized Deposits Into U.S. Banking System

TLDR:

• Custodia and Vantage Bank launch tokenized deposits, connecting stablecoins directly to U.S. bank systems.
• The consortium enables banks to issue digital dollars under a single interoperable blockchain platform.
• Custodia’s patent-backed framework allows deposits to function as both tokenized assets and stablecoins.
• The Avit stablecoin enables cross-bank transfers while keeping tokens within regulated banking networks.

A new chapter in U.S. banking just opened. Custodia Bank and Vantage Bank have launched tokenized deposits, giving traditional banks direct access to blockchain infrastructure. 

The platform connects stablecoins and tokenized deposits in a single regulated system. It’s designed to make money movement faster, more secure, and interoperable between banks. The launch follows years of development and marks a turning point in how digital assets merge with traditional finance.

The initiative was revealed in a joint press release from Custodia Bank and Vantage Bank on October 23, 2025, confirming the formation of a banking consortium that’s open to institutions of all sizes. 

Caitlin Long, Custodia’s founder, also shared the milestone on X, noting it was five years in the making.

Tokenized Deposits Meet Traditional Banking

The system integrates tokenized deposits and stablecoins directly into online banking. 

According to the companies, it solves a long-standing issue in digital finance, interoperability. Rather than operating across fragmented platforms, banks will now share a single network that supports both assets.

Each participating bank retains control of its own wallet for deposits and stablecoins, allowing full custody and transparency. The model was built to prevent deposits from flowing away from the banking system, a concern often tied to crypto adoption. 

The tokens can shift between deposit and stablecoin categories without losing oversight, maintaining compliance under existing financial laws.

Early pilot programs already tested real-world use cases. These included cross-border transactions, automated payments in construction, and flexible payroll solutions for service companies. 

Each pilot showed how the framework can streamline operations and reduce transaction friction.

Consortium Opens Door to U.S. Banks and Credit Unions

Vantage and Custodia invited banks and credit unions across the country to join the consortium. Members gain access to Custodia’s patent-backed technology developed since 2020, including its protocol for tokenizing U.S. dollars.

Custodia’s position as a “permitted payment stablecoin issuer” under the GENIUS Act gives consortium banks early regulatory clarity. This makes it easier for members to adopt blockchain-based tools without risking compliance gaps.

Unlike closed systems run by large banks, this framework promotes open participation. It’s meant to help smaller community banks innovate and stay competitive in digital finance. 

Vantage Bank said the goal is to bring secure, interoperable, and regulation-friendly blockchain access to regional institutions nationwide.

The joint initiative also introduced Avit, a stablecoin that interacts with tokenized deposits under one smart contract system. It supports “monetary singularity,” allowing deposits and stablecoins to coexist in one unified framework, a first for the industry.

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