The post Custodia Launches Bank-Issued Stablecoin on Ethereum appeared on BitcoinEthereumNews.com.

Crypto friendly Custodia Bank, working alongside Vantage Bank, completed the tokenization of dollar-demand deposits with the issuance of its trademarked Avit stablecoin on Ethereum mainnet.  The stablecoin issuance, which the bank says is the “first bank-issued stablecoin on a permissionless blockchain,” took place in eight transaction stages. Custodia Bank handled the blockchain issuance and custody services while Vantage Bank provided FedWire/ACH services and managed the stablecoin fiat reserves.  “We broke ground on the legal/regulatory front, proving that U.S. banks can collaborate to tokenize demand deposits on a permissionless blockchain in a regulatorily-compliant manner, said Custodia Bank CEO Caitlin Long in a statement. “Custodia looks forward to the reversal of U.S. regulatory obstacles that have stymied stablecoin innovation in recent years, so that American consumers can benefit from the substantial network effects and global reach of permissionless blockchain technologies.”  All parties to the series of transactions observed “low transaction costs, fast transaction settlement, programmability and auditability within a safe, compliant and regulated banking environment,” according to a statement from Custodia. “A new U.S. dollar payment rail has now been activated inside the U.S. banking system, at a time when the global community is increasingly demanding U.S. dollar stablecoins for transactional use.” The bank’s collaboration comes as stablecoins are a crypto industry focal point, highlighted by the GENIUS Act, a bill with bi-partisan support that would provide regulatory clarity for stablecoins and their issuers.  That regulation might lead to a host of new stablecoins and issuers. “As soon as this legislation passes, there are going to be 10,000 companies looking at this,” Niklas Kunkel, the founder of blockchain oracle builder Chronicle Labs told Decrypt in February.  Some of those stablecoins could come from other banks, like Bank of America, whose CEO already said the firm would look to debut a stablecoin if…

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Filed under: News - @ March 25, 2025 9:18 pm