Custodia and Vantage Bank Launch America’s First Bank-Issued Stablecoin on Blockchain

Custodia Bank and Vantage Bank have announced the launch of what they describe as the first-ever U.S. bank-issued stablecoin deployed on a permissionless blockchain.

On March 25, Custodia revealed that it had tokenized U.S. dollar demand deposits and issued the stablecoin “Avit” on Ethereum using the widely adopted ERC-20 token standard.

“A new U.S. dollar payment rail has now been activated inside the U.S. banking system,” Custodia declared in its announcement.

U.S. Banks Can Issue Tokenized Deposits on Public Blockchains

Custodia said that the development demonstrates that federally regulated banks can compliantly issue tokenized deposits on public blockchain networks.

“We broke ground on the legal/regulatory front, proving that US banks can collaborate to tokenize demand deposits on a permissionless blockchain in a regulatorily-compliant manner,” Custodia CEO Caitlin Long said.

Long clarified via posts on X that Avit represents a “real dollar” stablecoin, distinguishing it from what some regulators refer to as “synthetic” dollars.

Unlike synthetic tokens, Avit is backed by demand deposits — funds that can be withdrawn on demand, such as those in checking accounts — and issued by federally authorized institutions.

Vantage Bank CEO Jeff Sinnott echoed this sentiment, calling the launch a “pivotal moment” that highlights the potential of blockchain and stablecoins to transform the payments sector.

Notably, Custodia’s decision to deploy the stablecoin on Ethereum rather than Bitcoin drew praise from Ethereum supporters.

Advocate Evan Van Ness commented, “ETH fixed this. Bitcoin couldn’t,” while educator Anthony Sassano reaffirmed that the “permissionless blockchain” mentioned was indeed Ethereum.

According to DeFiLlama, Ethereum currently secures over $125.8 billion in stablecoins, nearly double that of its closest rival, Tron.

Additionally, Ethereum hosts more than $3.6 billion in tokenized U.S. Treasury bills — far ahead of the next competitor, Stellar.

Active Stablecoin Wallets Surge Over 50% in One Year

As reported, the number of active stablecoin wallets has surged by over 50% in the past year, reflecting growing adoption and engagement within the digital asset ecosystem.

More specifically, active stablecoin addresses increased from 19.6 million in February 2024 to 30 million in February 2025, marking a 53% year-on-year growth.

Growing institutional adoption, expanding use in payments, and rising integration in decentralized finance (DeFi) has played a key role in the increase in active stablecoin wallets.

These factors have made stablecoins a fundamental component of the digital economy, offering liquidity, stability, and accessibility to users worldwide.

Beyond active addresses, the total stablecoin supply has also surged. In February 2024, the total supply stood at $138 billion, but by February 2025, it had climbed to $225 billion, reflecting a 63% year-on-year increase.

Last month, Federal Reserve Governor Christopher Waller weighed in on stablecoins, arguing that U.S. dollar-pegged digital assets could strengthen the dollar’s global dominance.

Waller claimed that stablecoins already play an important role in the financial ecosystem.

They provide a stable store of value for crypto traders, facilitate access to US dollars in high-inflation economies, enable faster cross-border payments, and have shown early but promising use cases in retail transactions.

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