The crypto-friendly Custodia Bank has labored with Vantage Bank to finish what the 2 companies say is “America’s first-ever bank-issued stablecoin” on a permissionless blockchain.

Custodia said on March 25 that it tokenized US greenback demand deposits and facilitated the issuance, switch and redemption of the stablecoin “Avit” on Ethereum by way of the ERC-20 token normal.

“A new US dollar payment rail has now been activated inside the US banking system,” Custodia added.

“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,” stated Custodia CEO Caitlin Long.

Vantage Bank CEO and President Jeff Sinnott stated the occasion was a “pivotal moment in reshaping the financial landscape, demonstrating how blockchain and stablecoins can revolutionize payments.”

In a sequence of posts on X, Long explained that the Avit stablecoin was a “real dollar” and never a “synthetic” greenback, as Federal Reserve Board Governor Christopher Waller called stablecoins in a Feb. 12 speech.

“Real” US {dollars}, Long defined, can solely be issued by the Federal Reserve and some legally approved entities, together with Custodia Bank. She added that Avit is a “real dollar” because it tokenizes a financial institution’s demand deposit — funds that prospects can withdraw on-demand, akin to cash in a checking account.

Ethereum backers cheer Custodia’s chain alternative

Custodia has traditionally championed Bitcoin, and Ethereum advocates have been fast to notice that the financial institution selected Ethereum for the stablecoin.

“ETH fixed this. Bitcoin couldn’t,” wrote Ethereum advocate Evan Van Ness. Ethereum educator Anthony Sassano additionally posted to clarify the “permissionless blockchain” Custodia referred to in its announcement.

“Just in case it wasn’t obvious, this is built on Ethereum.”

Related: Ethereum poised for record highs in Q1 2025, analysts predict

Ethereum secures over $125.8 billion value of stablecoins on its community, practically doubling the second-place Tron blockchain at $64.8 billion, DefiLlama knowledge reveals.

Ethereum also tokenizes over $3.6 billion value of US Treasury bills — seven instances greater than its subsequent competitor, Stellar, at $465.7 million, in line with RWA.xyz data.

Magazine: Comeback 2025: Is Ethereum poised to catch up with Bitcoin and Solana?

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