Custodia Bank and Vantage Bank Team Up to Launch Groundbreaking Stablecoin Avit, Marking a First for the U.S. Banking Sector

Custodia Bank, a notable player in the crypto space, has partnered with Vantage Bank to introduce a groundbreaking stablecoin

Custodia Bank, a well-known name in the crypto sphere, has teamed up with Vantage Bank to create a stablecoin, a new feat in the U.S. banking scene.

In a joint statement on March 25, they announced the launch of the “Avit” stablecoin, backed by tokenized U.S. dollar demand deposits. Unlike the synthetic dollars discussed by Federal Reserve officials, Avit is backed by actual dollars in a U.S. bank’s demand deposit accounts.

This integration of blockchain into the U.S. financial system allows for real-time transfer and redemption on the Ethereum blockchain using the ERC-20 standard.

The partnership marks a breakthrough in U.S. regulations, as pointed out by Caitlin Long, CEO of Custodia. In an email toDecrypt, Long highlighted the partnership with Vantage Bank, which enables U.S. banks to work with blockchain technology to create new payment systems.

“We are able to do this because of a partnership with a U.S. national bank, which is subject to the same regulations as any other national bank,” added Long.

This event marks a pivotal moment in the evolution of the financial landscape. Jeff Sinnott, CEO of Vantage Bank, praised the collaboration, stating that it will be a key moment in shifting the payments space through the use of stablecoins and blockchain.

“We are proud to be at the forefront of this innovation,” said Sinnott.

Long further clarified that Avit is fully backed by legal U.S. dollars, and only a select group of entities, including Custodia, are authorized to issue such “real” dollars.

“We are the only ones who can mint and burn Avit in order to keep the token fully backed,” said Long.

The choice of Ethereum for this project also sparked excitement in the crypto community. Supporters of Ethereum, such as advocate Evan Van Ness and educator Anthony Sassano, pointed out that Ethereum's permissionless blockchain made it the ideal platform for this initiative.

“This is huge. It's the moment we've all been waiting for,” said Van Ness.

Moreover, Ethereum's established dominance in the stablecoin market, holding over $125 billion worth of stablecoins, solidified the blockchain's suitability for such innovations.

As Ethereum continues to lead in tokenized assets, including over $3.6 billion in U.S. Treasury bills, this partnership between Custodia and Vantage Bank signals a bold new era for both the banking and crypto industries.