Catenaa, Sunday, March 30, 2025-Custodia Bank and Vantage Bank have introduced Avit, the first US bank-issued stablecoin on a public blockchain, marking a major step in regulated digital payments.
The March 25 pilot involved minting, transferring, and redeeming Avit tokens on Ethereum’s ERC-20 standard, demonstrating a fully compliant, bank-backed stablecoin process. Unlike existing stablecoins, Avit operates entirely within a regulated banking framework, adhering to anti-money laundering (AML) and Bank Secrecy Act (BSA) rules.
Custodia managed the issuance and monitoring of the tokens, while Vantage Bank held the fiat reserves, ensuring settlement via Fedwire and ACH. The pilot enabled a bank customer to self-custody Avit, transact with third parties, and redeem the tokens for US dollars.
Custodia CEO Caitlin Long called the move a regulatory breakthrough, proving that U.S. banks can tokenize deposits within compliance standards. Vantage CEO Jeff Sinnott said the initiative could reshape cross-border payments while reinforcing trust in the US dollar.
The banks aim to expand Avit’s use as a real-time, programmable payment system under US banking laws. With policymakers debating stablecoin regulation, Avit may offer a compliant path forward for digital dollars.
