Custodia and Vantage Bank Complete Tokenization of U.S. Dollar Demand Deposits on Ethereum

Custodia Bank and Vantage Bank have successfully brought U.S. dollar demand deposits onto the Ethereum blockchain, marking a major milestone in the fusion of traditional banking and digital assets.

As part of the initiative, the banks issued and redeemed Custodia’s Avit stablecoin on Ethereum, demonstrating the potential of blockchain technology in regulated financial environments.

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

In this collaboration, Vantage Bank managed fiat reserves and handled traditional financial transactions via Fedwire and ACH, while Custodia took charge of blockchain-based functions such as token issuance, custody, and reconciliation through its Avit Management System.

This successful test highlights the increasing role of blockchain in mainstream banking and could set the stage for broader adoption of tokenized financial assets.