Custodia Bank and Vantage Bank Texas have expanded their pilot program into a nationwide network for US banks, launching a live platform for tokenized deposits. This innovative system allows participating banks to issue tokens that represent insured deposits, moving traditional bank money onto a blockchain while fully maintaining standard protections and regulatory compliance.
Analysts see this platform as a solution for real-world transactions. The setup adheres strictly to US banking rules and complies with the GENIUS Act, crypto legislation that permits specific bank-issued stablecoins to be treated as deposit instruments rather than securities.
The tokens are designed to adapt: within a participating bank, they function as fully FDIC-insured tokenized deposits. When transferred to another institution or wallet, they operate like a stablecoin.
Custodia Bank CEO Caitlin Long explained that a patent-pending protocol, which combines an on-chain oracle and off-chain operational controls, manages these changes seamlessly. Long emphasized that the same token, from the same smart contract, can change its responsible party and regulatory status throughout its lifecycle without needing to be redeemed or converted. The platform uses Infinant's APIs and ledger infrastructure to facilitate these conversions.
The platform operates on a permissionless network. Trial transactions have already taken place on Ethereum, with work underway for Bitcoin. This approach for open access and interoperability stands in contrast to the norm, where major stablecoin issuers and payment platforms often build proprietary chains or systems.
According to Long's statement, their model prioritizes a legal framework that promotes interoperability within the law, unlike the complex legal structures often relied upon by other stablecoin issuers.
Dan Dadybayo, research and strategy lead at Unstoppable Wallet, noted that the two banks are building a compliant settlement layer that moves insured dollars at blockchain speed while offering the same level of safety. He highlighted that this gives smaller institutions the ability to compete on efficiency and programmability. Dadybayo believes that if widely adopted, this could quietly evolve the current financial network into a parallel payments network built from within the existing system.
October 2025, Cryptoniteuae