Ethereum Welcomes Tokenized U.S. Dollar Demand Deposits from Custodia and Vantage Bank

Custodia and Vantage Bank Tokenize U.S. Dollar Demand Deposits on Ethereum in Compliance-Driven Pilot

In a significant step toward integrating blockchain technology with traditional finance, Custodia Bank and Vantage Bank have successfully tokenized U.S. dollar demand deposits on the Ethereum mainnet.

The initiative saw the issuance and redemption of Custodia’s Avit stablecoin on Ethereum, marking a key milestone in regulated digital asset adoption.

To ensure strict adherence to U.S. banking laws—including BSA, AML, and OFAC regulations—the banks conducted a series of eight controlled test transactions. These transactions covered the full scope of token operations, from minting and transferring to redeeming Avit tokens, all within a regulated framework.

Under the partnership, Vantage Bank managed fiat reserves and processed traditional banking transactions via Fedwire and ACH, while Custodia oversaw blockchain-related operations, including issuance, custody, and reconciliation, through its Avit Management System.

This successful pilot highlights the growing role of blockchain in the financial sector and paves the way for broader institutional adoption of tokenized banking assets.