Custodia and Vantage banks have successfully tokenized USD deposits on the Ethereum blockchain. This process involved eight test transactions conducted in full compliance with U.S. banking regulations.
How Did the Tokenization Process Progress
The two banks engaged in the production and redemption of Avit tokens indexed to the USD through eight regulated test transactions on the Ethereum mainnet. Once created as digital deposits, the tokens were transferred and eventually redeemed by the banks. Regulations such as the Bank Secrecy Act, Anti-Money Laundering, and OFAC compliance were considered.
Task Distribution Between Banks
The project outlined clear task distributions. Vantage Bank managed traditional banking services and fiat currency movements via Fedwire and ACH systems. Custodia Bank was responsible for digital operations, including token minting on Ethereum, secure storage, and blockchain transaction recording using the Avit Management System.
Legal Compliance and Technical Integration
The Avit system was used to manage the circulation and monitoring of tokens, ensuring compatibility between traditional and blockchain-based systems while adhering to legal requirements.
The successful integration of traditional finance with blockchain technology by Custodia and Vantage demonstrates potential for further development and adoption of such solutions.
