Stablecoin

Bank

2024

Jeff

DeFi

<div class="intro-text">
 Custodia Bank and Vantage Bank have made history by issuing America’s first bank-backed stablecoin on a permissionless blockchain. 
</div>
This milestone marks the first instance of a U.S. bank tokenizing demand deposits, enabling seamless transactions using Avit<img src="https://s.w.org/images/core/emoji/15.0.3/72x72/2122.png" alt="™" class="wp-smiley" style="height: 1em; max-height: 1em;"> stablecoins, <a href="https://custodiabank.com/press/custodia-issues-Stablecoin/" rel="noopener noreferrer nofollow">according to the press release.</a>
As part of this initiative, the banks collaborated to mint, transfer, and redeem Avit tokens on the Ethereum mainnet using the ERC-20 standard. Vantage Bank managed the fiat reserves and facilitated Fedwire/ACH services, while Custodia Bank handled blockchain issuance, redemption, custody, and transaction monitoring. The test transactions showcased significant efficiencies, including low fees, fast settlement, programmability, and enhanced auditability—all within a regulated banking framework.
Beyond its technical achievements, the project also set a legal precedent by demonstrating that U.S. banks can tokenize deposits while complying with regulatory requirements such as anti-money laundering (AML) and sanctions screening. To ensure compliance, both banks worked closely with their respective regulators, developing policies that distinguish their approach from existing stablecoin issuers.
Caitlin Long, CEO of Custodia Bank, highlighted the broader implications of this development. 
<blockquote>
 “This is a significant step toward integrating stablecoins into the U.S. banking system in a compliant manner. We hope this success paves the way for regulatory clarity that fosters more innovation in the space,” 
</blockquote>
she said.
Echoing this sentiment, Jeff Sinnott, President and CEO of Vantage Bank, underscored the transformative potential of blockchain in traditional banking. 
<blockquote>
 “This marks a turning point in financial modernization. By leveraging stablecoins, banks can lead in cross-border transactions while reinforcing the strength of the U.S. dollar,” 
</blockquote>
he stated.
The transactions were executed using Custodia’s patent (U.S. Patent 11392906) for tokenizing bank deposits on permissionless blockchains.&nbsp;
Meanwhile, in a separate development, a <a href="https://defi-planet.com/2025/03/stablecoin-adoption-surges-active-wallets-jump-53-in-a-year-report/" rel="noopener noreferrer nofollow">recent report by Artemis and Dune reveals a 53% surge in active stablecoin wallets</a>, rising from 19.6 million to 30 million between February 2024 and 2025. Titled The State of Stablecoins 2025, the report highlights growing adoption and stablecoins’ expanding role in bridging traditional finance and crypto. Analysts attribute the increase to greater user engagement and deeper integration into digital finance.
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The post <a href="https://defi-planet.com/2025/03/custodia-and-vantage-bank-issue-first-u-s-bank-backed-stablecoin-on-blockchain/" rel="noopener noreferrer nofollow">Custodia and Vantage Bank Issue First U.S. Bank-Backed Stablecoin on Blockchain</a> appeared first on <a href="https://defi-planet.com" rel="noopener noreferrer nofollow">DeFi Planet</a>.

Custodia and Vantage Bank Issue First U.S. Bank-Backed Stablecoin on Blockchain

DeFi Planet

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