U.S. Dollar Demand Deposits Tokenized on Ethereum by Custodia and Vantage Bank

Custodia and Vantage Bank Bring U.S. Dollar Deposits to Ethereum Through Tokenization

In a major step toward bridging traditional banking with blockchain technology, Custodia Bank and Vantage Bank have successfully tokenized U.S. dollar demand deposits on the Ethereum mainnet.

The banks issued and redeemed Custodia’s Avit stablecoins on Ethereum, marking a significant advancement in regulated digital asset innovation.

To ensure full compliance with U.S. banking regulations, including BSA, AML, and OFAC requirements, the institutions conducted a series of eight controlled test transactions. These transactions involved minting, transferring, and redeeming Avit tokens under strict regulatory oversight.

Under the partnership, Vantage Bank managed fiat reserves and processed traditional banking transactions via Fedwire and ACH, while Custodia oversaw blockchain-related operations, including token issuance, custody, and reconciliation, through its proprietary Avit Management System.

This milestone underscores the growing role of blockchain in the regulated financial sector, paving the way for wider institutional adoption of tokenized assets.