Custodia and Vantage Bank Launch Revolutionary Tokenized Deposit Platform

Banking's digital transformation accelerates as traditional institutions embrace blockchain technology.

Breaking Down Banking Barriers

Custodia Bank partners with Vantage Bank to deploy a groundbreaking tokenized deposit system that bridges traditional finance with digital assets. The platform enables instant settlement and 24/7 accessibility—something traditional banking has struggled to deliver for decades.

How Tokenization Reshapes Deposits

Deposits transform into programmable digital tokens on distributed ledgers. Customers gain unprecedented control over their funds while maintaining FDIC insurance protections. The system bypasses slow interbank settlement networks that typically take days to clear transactions.

The Compliance Advantage

Unlike decentralized alternatives, this platform operates within existing regulatory frameworks. Banks maintain full KYC/AML oversight while offering crypto-native features. Finally, a solution that doesn't make compliance officers break out in cold sweats.

Market Impact and Adoption Curve

Early testing shows transaction speeds 50x faster than traditional banking systems. The platform processes settlements in seconds rather than days. Regional banks particularly benefit from leveled playing field against financial giants.

Another case of traditional finance playing catch-up with crypto innovation—but at least they're finally showing up to the party, even if fashionably late with their regulatory permission slips in hand.

Connecting Traditional Banking and Crypto

Tokenized deposits are digital versions of regular bank deposits issued on a blockchain and backed by real U.S. dollars held by banks. This new system lets banks use a single digital token that works as both a tokenized deposit and a stablecoin, which bridges the gap between traditional banking and the crypto world. The platform is open to banks of all sizes with full control of their digital wallets that store both tokenized deposits and GENIUS Act-compliant stablecoins.

The technology uses Custodia’s blockchain system and Infinant’s Interlace network to process transactions. This launch comes seven months after Custodia became the first U.S. bank to issue tokenized deposits on a permissionless blockchain with the help of Vantage Bank.

The introduction of tokenized deposits also puts banks in competition with private stablecoins, a market now worth about $300 billion. Stablecoins have gained more attention after U.S. President Donald TRUMP signed the GENIUS Act in July, which gave the market a boost. However, many banks are worried that stablecoin issuers offering interest and yields could weaken traditional banking systems.

In April, U.S. The Treasury estimated that the stablecoin market could reach a cap of $2 trillion by 2028. Custodia’s system could help banks reduce those risks and stay competitive in the digital era.

Custodia has already started testing its tokenization technology in different sectors, including cross-border payments, construction payouts, supply chain settlements, and payroll systems.

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