According to a public blockchain network, Custodia Bank and Vantage Bank have published the first Stablecoin supported by the American bank, according to a public blockchain network, according to a March 25 press release.
The Stablecoin was used in a series of test transactions with a business customer. The pilot included mining, transfer and silver-plating tokens on the Ethereum (ETH) Mainnet using the ERC-20 standard.
The relocation marks the first time that the dollar deposits have come from regulated banks on Ethereum.
Banks make tokenized payments
The series of eight test transactions showed a complete in accordance with a process for maturing, transferring and repaying stablecoins on a blockless blockchain.
Avit tokens were made using the generally adopted ERC-20 standard, and the pilot concerned Real-World business-to-business transfers and redemption in Fiat US Dollars.
The relocation represents a breakthrough in mixing blockchain technology with the American banking system at a time of rising global demand for digital dollar payments.
Custodia Bank, based in Wyoming, managed the issue, custody, monitoring and reconciliation of the tokens using its own Avit management system. In the meantime, Vantage Bank, based in Texas, held the Fiat reserves that supported the tokens and facilitated the traditional settlement services via Fedwire and Ach.
The test concerned a banking customer that transferred AVIT tokens to self-wort, transactions with third parties outside the banking system and relieving it back into dollar deposits.
In contrast to existing Stablecoins that often work outside the traditional bank perimeter, the Avit pilot was fully executed within a regulated banking environment.
Both banks provided compliance with Bank Secrecy Act (BSA), anti-money laundering practices (AML) and rules of the Office of Foreign Assets Control (OFAC). This required the development of tailor -made documentation, policy and procedures that meet the federal bank standards – determining a potential blueprint for other institutions.
Custodia Bank CEO Caitlin Long said:
“We have broken ground on the legal and regulatory front, which shows that American banks can work together to inflict demand -free blockchain in a regulatorly in accordance with way.”
New payment rail
With programmable functions, fast settlement times, low transaction costs and transparent auditability, the pilot revealed the potential of blockchain-based Stablecoins to modernize US dollar payments while maintaining the banking system guarantees.
CEO of Vantage Bank Jeff Sinnott called the milestone ‘a crucial moment in the reforming of the financial landscape’, and notes that it demonstrates how banks can lead in cross -border payment innovation while reinforcing confidence in the US dollar.
The transactions also marked the first use of the US patent of Custodia (no. 11392906), granted in 2022, for the tokenization of bank deposits on authorizationless blockchains.
The banks are planning to serve this pilot as a basis for future real -time, programmable payment infrastructure anchored in the regulatory strictness of American bank legislation.
While American policymakers continue to debate about the role of stablecoins in the broader economy, the Avit launch can mean a path forward for dollardigitalization that coordinates innovation with supervision.
State in this article
