Custodia Bank and Vantage Bank have successfully launched the first-ever bank-issued stablecoin on a permissionless blockchain, utilizing the Ethereum mainnet. The stablecoin, named Avit™, marks a historic milestone in bridging traditional banking with blockchain technology, tokenizing U.S. dollar demand deposits to create a fully regulated digital asset.
The announcement, made today, follows the completion of the issuance, transfer, and redemption of Avit stablecoins for a bank customer on March 24, 2025. This achievement positions Custodia and Vantage as pioneers in integrating blockchain innovation into the U.S. banking system, offering a new payment rail for dollar-based transactions at a time when global demand for stablecoins continues to surge.
A Collaborative Effort
The partnership between Custodia Bank, based in Cheyenne, Wyoming, and Vantage Bank, headquartered in San Antonio, Texas, leveraged the strengths of both institutions. Vantage Bank managed the fiat reserves and provided traditional banking services, including Fedwire and ACH transactions, while Custodia oversaw the blockchain-related operations. This included the issuance and redemption of Avit tokens, custody services, transaction monitoring, and reconciliation through its proprietary Avit Management System.
The process unfolded in eight stages, demonstrating the practical utility of the stablecoin. A bank customer minted Avit tokens, transferred them into self-custody, conducted business-to-business transactions outside the banking system, and ultimately returned the tokens to Custodia for redemption into U.S. dollar demand deposits—all while adhering to stringent U.S. banking regulations, including BSA/AML and OFAC compliance.
A “Real Dollar” Stablecoin
Unlike existing stablecoins in the cryptocurrency space, which Federal Reserve Governor Christopher Waller has described as “synthetic dollars,” Avit stands out as a “real dollar” stablecoin. Issued by a regulated bank authorized to accept deposits, Avit is directly tied to tokenized demand deposits, distinguishing it from other digital assets that lack the backing of a banking institution.
Caitlin Long, CEO of Custodia Bank, emphasized the significance of this distinction. “This is a game-changer for traditional finance users who want the benefits of permissionless blockchains—low costs, fast settlement, programmability, and auditability—while staying within the U.S. banking system,” Long said. “We’ve taken territory not just for crypto, but for traditional finance itself.”
Implications for Banking and Blockchain
The launch of Avit comes amid growing interest in stablecoins, which are digital currencies pegged to stable assets like the U.S. dollar. With a global market cap exceeding $200 billion, stablecoins have become a vital tool for cross-border payments and financial innovation. However, until now, their issuance has largely been dominated by non-bank entities like Tether (USDT) and Circle (USDC).
Custodia and Vantage’s achievement signals a shift, opening the door for regulated financial institutions to play a larger role in the stablecoin ecosystem. “This event marks a pivotal moment in reshaping the financial landscape,” said Jeff Sinnott, President and CEO of Vantage Bank. “It demonstrates how blockchain and stablecoins can revolutionize payments while meeting the highest regulatory standards.”
Overcoming Obstacles
The journey to this milestone was not without challenges. Custodia Bank, a crypto-focused institution founded in 2020, has faced significant regulatory hurdles in its mission to integrate blockchain with banking. The issuance of Avit has been part of its business plan since its inception, requiring years of persistence and collaboration with partners like Vantage Bank to navigate the complex U.S. regulatory environment.
“Major kudos to the Custodia and Vantage teams for their hard work in overcoming obstacles to make this a reality,” Long added. “This is just the beginning.”
A New Era for U.S. Finance
The successful launch of Avit on Ethereum’s mainnet, using the ERC-20 token standard, is poised to accelerate the adoption of blockchain technology within the U.S. banking sector. As regulatory attitudes toward stablecoins evolve—spurred by recent legislative efforts like the GENIUS Act and the Clarity for Payment Stablecoins Act—this pioneering step by Custodia and Vantage could pave the way for broader acceptance and innovation.
With the global community increasingly turning to U.S. dollar stablecoins for transactional use, this development not only strengthens the dollar’s digital presence but also positions American banks at the forefront of the financial revolution.
