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Custodia Bank and Vantage Bank Texas have launched a blockchain platform that allows US banks to issue their own tokenized deposits and stablecoins while keeping customer funds within the traditional banking system, addressing a key concern among community banks wary of crypto disintermediation.
The SOC 2-certified platform, announced October 23, operates under a patent-protected framework compliant with the GENIUS Act and enables banks to offer digital asset services without exposing themselves to crypto market volatility.
The Wyoming and Texas banks say the system has already completed pilot programs for cross-border settlements, supply chain payments, and payroll disbursements.
“By ensuring tokens remain within the banking environment, the model helps preserve the advantages of tokenization while encouraging deposits to remain in, or return to, the issuing institution,” said Custodia and Vantage in a joint statement.
The platform which has been in development since early 2023 operates under a patent-protected framework that enables financial institutions to issue and manage compliant tokenized deposits and stablecoins without ceding control or exposing themselves to crypto-market volatility.
The project leverages Custodia’s “bank-grade blockchain platform,” which has received the SOC 2 Type II compliance certification from the American Institute of Certified Public Accountants (AICPA). This certification affirms adherence to rigorous cybersecurity and operational standards for safeguarding client data.
Banks joining the consortium as an initiative spearheaded by Vantage Bank Texas will be able to tokenize deposits, manage digital wallets, and issue payment stablecoins within a regulated structure.
According to the official release, participating institutions will maintain full control of their own wallets while accessing Custodia’s secure digital infrastructure.
The model’s architecture also incorporates Infinant’s Interlace network, a payment framework that facilitates the issuance, transfer, and redemption of digital assets on blockchain rails. Custodia’s platform is compliant with the GENIUS Act, which recognizes the bank as an approved payment stablecoin issuer under U.S. law.
“The technology provides an efficient pathway for banks and credit unions to participate in the next generation of money movement without compromising their regulatory obligations,” said Caitlin Long, CEO of Custodia Bank. “Our focus has always been bridging the gap between blockchain innovation and the rigor of traditional banking.”
The tokenized deposits and stablecoins platform has already undergone a series of pilot programs targeting use cases such as cross-border settlements, supply chain payments, and on-demand payroll disbursement.
Early results from these tests suggest that blockchain-based transaction systems could significantly reduce operational costs and processing times for small and mid-sized financial institutions.
According to Jeff Sinnott, President and CEO of Vantage Bank Texas, “Our goal is to future-proof community banking by ensuring we can offer digital asset functionality safely and within a regulated framework. This collaboration with Custodia demonstrates that innovation and compliance can coexist.”
By maintaining bank-issued custody of digital assets, the framework helps prevent disintermediation, a common concern among traditional lenders wary of losing control to third-party crypto operators.
Despite the growing appeal of tokenized deposits and stablecoins, U.S. banking groups remain cautious. Earlier this year, the American Bankers Association (ABA) and the Bank Policy Institute (BPI) urged lawmakers to revise the GENIUS Stablecoin Act, claiming it contains a potential “rewards loophole.”
They argued that while the Act bans stablecoin issuers from offering direct interest, it does not prohibit exchanges or fintech intermediaries from rewarding users in similar ways—potentially drawing deposits away from banks.
In response, Coinbase which is a leading cryptocurrency exchange dismissed these claims, saying the real concern among banks is the potential erosion of their multi-billion-dollar annual payment fee revenues.
Industry analysts note that the arrival of tokenized deposits and stablecoins could eventually make transaction processing more efficient and transparent, but only if regulatory clarity keeps pace.
The Custodia-Vantage partnership represents one of the most concrete steps toward merging traditional banking with blockchain technology.
By introducing a compliant and auditable system for tokenized deposits and stablecoins, it attempts to demonstrate that digital innovation can strengthen rather than disrupt as the banking sector.
While the platform’s success will depend on broader adoption and continued regulatory support, its existence signals a shift in how banks perceive blockchain: not as competition, but as a tool for modernization.
