Crypto-focused financial institutions Custodia Bank and Vantage Bank have unveiled a blockchain-powered platform that enables traditional banks to issue tokenised deposits—digital representations of fiat deposits recorded on a blockchain. The new system, which is patent-protected, aims to help banks process transactions more efficiently while maintaining the safety and stability of customer deposits within the regulated banking system.
In a joint statement, the banks explained that the framework provides institutions and their clients with “the efficiencies and security of tokenisation while safeguarding core deposits from the risk of disintermediation.” The platform is built to ensure that tokenised deposits remain within the banking ecosystem, unlike many private stablecoins that operate outside the traditional financial system.
Tokenised deposits function as digital versions of regular bank deposits, backed by real U.S. dollars. The Custodia-Vantage system uses a single digital token that can serve as both a tokenised deposit and a GENIUS Act-compliant stablecoin. This dual-use model bridges the gap between traditional banking and decentralised finance, offering banks of all sizes the opportunity to control their digital wallets containing tokenised assets and stablecoins.
The new platform integrates Custodia’s blockchain infrastructure with Infinant’s Interlace network to handle transactions securely and at scale. Its launch follows Custodia’s milestone earlier this year, when it became the first U.S. bank to issue tokenised deposits on a permissionless blockchain, a development that was also supported by Vantage Bank.
This innovation comes amid rising competition between banks and private stablecoin issuers, whose combined market capitalisation has surpassed $300 billion. The GENIUS Act, signed by President Donald Trump in July, has further accelerated the stablecoin market’s momentum. However, many traditional banks remain cautious, fearing that yield-bearing stablecoins could attract customer funds away from regulated deposits.
According to estimates from the U.S. Treasury, the stablecoin market could reach a valuation of $2 trillion by 2028, signalling a major shift in how digital money circulates. Custodia’s tokenisation system offers a potential solution for banks to retain relevance and competitiveness as financial transactions move toward blockchain-based models.
Custodia has already begun testing the technology across several sectors, including cross-border payments, supply chain settlements, construction disbursements, and payroll systems. By merging the stability of banking with the speed of blockchain, the Custodia-Vantage platform could mark a significant step toward mainstream adoption of tokenised finance.
