Nikolas Sargeant
Custodia Bank and Vantage Bank have announced the launch of “Avit,” America’s first-ever bank-issued stablecoin deployed on a public blockchain. On March 25, Custodia revealed that it had tokenized U.S. dollar demand deposits and issued Avit on Ethereum using the ERC-20 token standard. This move introduces a new U.S. dollar payment rail into the U.S. banking system.
Custodia’s announcement highlights that this development proves U.S. banks can compliantly issue tokenized deposits on permissionless blockchains. Custodia CEO Caitlin Long stated that this breakthrough demonstrates how banks can collaborate to tokenize demand deposits on public blockchains in a regulatorily-compliant way.
Avit distinguishes itself from synthetic dollar tokens by being fully backed by real U.S. dollar demand deposits, which can be withdrawn on demand, such as those in checking accounts. This ensures that Avit is a stablecoin tied to actual assets. Vantage Bank CEO Jeff Sinnott called the launch a “pivotal moment,” noting its significance for the payments sector.
Ethereum was chosen as the platform for Avit, a decision that has received positive feedback from Ethereum supporters. The network, which secures a substantial portion of the stablecoin market, was highlighted for its role in enabling such innovations in blockchain technology.
Trump Stablecoin Push
At the Digital Assets Summit in New York, former President Donald Trump called on Congress to implement clear and straightforward regulations for stablecoins. Trump emphasized the need for common-sense rules in the rapidly growing digital finance sector, advocating for a regulatory framework that would benefit both institutional and individual investors. He also proposed the creation of a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile to bolster federal cryptocurrency holdings.
Trump criticized the Biden administration's handling of government crypto assets and vowed to end the previous administration's “regulatory war” on cryptocurrencies. His call for stablecoin regulation received support from industry leaders.
