Both banks ensured compliance with federal regulations, including the Bank Secrecy Act and anti-money laundering laws, creating a potential blueprint for other financial institutions.

On March 25, 2025, Custodia Bank and Vantage Bank launched Avit, which they claim is America's first bank-backed stablecoin, utilizing the Ethereum blockchain.

The stablecoin represents the successful tokenization of U.S. dollar demand deposits, marking a significant milestone in the integration of cryptocurrency with traditional banking.

Avit aims to provide fast settlements and transparency within a regulated framework, enhancing the potential for digital dollar payments.

The pilot program included real-world business-to-business transfers, allowing customers to seamlessly transfer Avit tokens and redeem them for fiat U.S. dollars.

Caitlin Long, CEO of Custodia Bank, emphasized the legal and regulatory achievements in tokenizing demand deposits on a permissionless blockchain.

Custodia Bank, based in Wyoming, managed the token issuance and compliance, while Vantage Bank in Texas held the fiat reserves backing the tokens.

Vantage Bank's CEO, Jeff Sinnott, described the partnership as a pivotal moment that could reshape the financial landscape and revolutionize payment systems through blockchain technology.

This initiative highlights the first tokenization of dollar demand deposits from regulated banks on Ethereum, showcasing a new avenue for digital transactions.

The choice of Ethereum for Avit was praised for its capability to support a permissionless blockchain solution, with the stablecoin operating on the widely adopted ERC-20 token standard.

Overall, this initiative represents a significant advancement in integrating blockchain technology within the banking sector.

Caitlin Long clarified that Avit represents a 'real dollar,' as it tokenizes funds accessible on-demand, distinguishing it from 'synthetic' dollars referenced by Federal Reserve officials.