Crypto-friendly Custodia Bank, in collaboration with Vantage Bank, has successfully launched what they claim to be the first-ever bank-issued stablecoin in the United States, built on a permissionless blockchain.
On March 25, Custodia announced that it had tokenized U.S. dollar demand deposits, enabling the issuance, transfer, and redemption of the stablecoin “Avit” on Ethereum using the ERC-20 standard.
“This marks the activation of a new U.S. dollar payment rail within the U.S. banking system,” the bank stated.
Custodia CEO Caitlin Long emphasized the regulatory significance of the achievement, stating, “We’ve broken new ground on the legal and regulatory front, proving that U.S. banks can work together to tokenize demand deposits on a permissionless blockchain while remaining compliant.”
Vantage Bank CEO and President Jeff Sinnott hailed the development as a major milestone, saying it showcases how blockchain technology and stablecoins can transform the payments industry.
In a series of posts on X, Long clarified that Avit is a “real dollar,” countering the view expressed by Federal Reserve Board Governor Christopher Waller on Feb. 12, when he referred to stablecoins as “synthetic” dollars.
She explained that only the Federal Reserve and a few legally authorized institutions—such as Custodia Bank—can issue real U.S. dollars. Avit qualifies as a “real dollar” because it represents tokenized demand deposits, which are immediately accessible funds like those in checking accounts.
Ethereum Community Applauds Custodia’s Choice
While Custodia has traditionally been a strong supporter of Bitcoin, Ethereum proponents were quick to highlight the bank’s decision to use Ethereum for its stablecoin launch.
“ETH made it happen. Bitcoin couldn’t,” commented Ethereum advocate Evan Van Ness. Similarly, Ethereum educator Anthony Sassano underscored that the “permissionless blockchain” referenced in Custodia’s announcement was, in fact, Ethereum.
Ethereum remains the dominant force in the stablecoin ecosystem, securing over $125.8 billion worth of stablecoins on its network—almost double that of Tron, which holds second place with $64.8 billion, according to DefiLlama data.
Additionally, Ethereum leads the tokenized U.S. Treasury bills market, managing over $3.6 billion worth—seven times more than its closest competitor, Stellar, which holds $465.7 million, per RWA.xyz data.
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