Custodia and Vantage Banks have introduced Avit, the first U.S. bank-issued stablecoin on a permissionless blockchain, marking a significant development in integrating blockchain technology with traditional finance.
Launch of Avit and Its Features
Avit is built on the Ethereum blockchain using the ERC-20 standard and is fully backed by U.S. dollar reserves. This initiative facilitates more secure and efficient transactions while ensuring full compliance with banking regulations.
Custodia and Vantage's Role in the Project
Custodia Bank manages the issuance of the Avit token and performs redemption and custody activities, while Vantage Bank handles all fiat transactions. Ethereum tests demonstrated the successful deployment of the stablecoin, showcasing the advantages of blockchain technology for banking.
Regulatory Aspects and Future of Avit
Custodia Bank has been involved in significant regulatory developments enabling banks to tokenize their deposits. Avit is backed by the U.S. banking sector, distinguishing it from other stablecoins like Tether and USD Coin.
The launch of Avit underscores a major shift toward blockchain adoption in the traditional banking sector. A regulated bank-issued stablecoin could significantly reshape financial transactions.
