Custodia, Vantage propose token that toggles between bank deposits and stablecoins
Cointelegraph 2026-06-18 21:02:29
Context: Custodia and Vantage Bank have proposed a new token that can automatically switch between a bank deposit and a stablecoin as it moves between participating banks and external users. The proposed system aims to connect traditional banking infrastructure with blockchain-based payment networks, allowing banks to retain customer deposits while offering blockchain-based payment services. The system, known as the Hazel network, is currently being tested by participating banks ahead of a broader rollout planned for later this year.
Key Facts
- Custodia and Vantage Bank have proposed a token that operates as a deposit issued by a participating bank when held within a banking consortium and as a stablecoin backed by cash and short-term Treasurys when transferred outside the Hazel network.
- The Hazel network has been running on Ethereum since March and is designed to support tokenized deposits, stablecoins, and other blockchain-based financial assets through a shared banking infrastructure.
- The platform is designed to allow participating institutions to use the system without replacing existing core banking systems, operating alongside current ledgers and payment infrastructure.
- The companies expect the Hazel network to become broadly available to banks and their customers in the fourth quarter of 2026, and it is being designed for banks and credit unions of all sizes, including community banks.
- The proposal comes as banks increasingly look for ways to offer blockchain-based payment services without losing customer deposits to stablecoin issuers, with The Clearing House planning to launch a tokenized deposit network in the first half of 2027.