Custodia, Vantage propose token that toggles between bank deposits and stablecoins

Written by Nate Kostarstaff writerReviewed by Robert Lakinstaff editorWritten by Nate Kostarstaff writerReviewed by Robert Lakinstaff editorCustodia, Vantage propose token that toggles between bank deposits and stablecoinsLatest NewsPublishedJun 18, 2026The proposed system aims to connect traditional banking infrastructure with blockchain-based payment networks with banks retaining customer deposits.Custodia and Vantage Bank have proposed a token that automatically switches between a bank deposit and a stablecoin as it moves between participating banks and external users.According to a white paper shared with Cointelegraph on Thursday, the token would operate as a deposit issued by a participating bank when held within a banking consortium and as a stablecoin backed by cash and short-term Treasurys when transferred outside the so-called Hazel network.The companies said the system has been running on Ethereum (ETH) since March and is being tested by participating banks ahead of a broader rollout planned for later this year. The platform is designed to support tokenized deposits, stablecoins and other blockchain-based financial assets through a shared banking infrastructure.According to the white paper, participating institutions would not need to replace existing core banking systems, with the platform operating alongside current ledgers and payment infrastructure.The companies said it was designed for banks and credit unions of all sizes, including community banks, and aims to let institutions participate in tokenized payments without moving customer deposits outside the banking system.Wyoming-based Custodia and Texas-based Vantage said they expect the Hazel network to become broadly available to banks and their customers in the fourth quarter of 2026.Related: UK crypto advocates launch campaign against banks blocking exchange transfersBanks seek alternatives to stablecoinsThe proposal comes as banks increasingly look for ways to offer blockchain-based payment se…

Custodia, Vantage propose token that toggles between bank deposits and stablecoins

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