[{"type":"paragraph","children":[{"text":"Crypto-friendly banks Custodia Bank and Vantage Bank have launched a turnkey blockchain solution allowing traditional banks to issue tokenized deposits that will work with stablecoins."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"The solution enables banks to leverage blockchain’s near-instant, low-cost transactions in an interoperable manner with other banks while being able to retain customer deposits, the two banks "},{"type":"link","url":"https://www.prnewswire.com/news-releases/vantage-bank-and-custodia-announce-launch-of-tokenized-deposits-for-us-banks-302592931.html?tc=eml_cleartime","children":[{"text":"said"}]},{"text":" in a statement on Thursday."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"block-quote","children":[{"text":"“The patent-protected framework is designed to provide institutions and their customers with the efficiencies and security of tokenization while safeguarding core deposits from the risk of disintermediation.”\n"}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"Tokenized deposits are digital versions of bank deposits issued on a blockchain, representing real US dollars held by banks. "}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"The initiative aims to address interoperability between crypto and traditional banking by introducing a single digital token that can function as both a tokenized deposit and a stablecoin. "}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"The platform is accessible to banks of all sizes, which maintain control of their wallets containing tokenized deposits and "},{"type":"link","url":"https://cointelegraph.com/explained/what-does-the-us-genius-act-mean-for-stablecoins?utm_source=chatgpt.com","children":[{"text":"GENIUS Act-compliant stablecoins."}]},{"text":""}]},{"type":"paragraph","children":[{"text":""},{"type":"link","url":"https://cointelegraph.com/explained/what-does-the-us-genius-act-mean-for-stablecoins?utm_source=chatgpt.com","children":[{"text":""}]},{"text":""}]},{"type":"paragraph","children":[{"text":"The solution leverages Custodia's bank-focused blockchain and payment platform Infinant’s Interlace network. It comes seven months after Custodia became the first bank to "},{"type":"link","url":"https://cointelegraph.com/news/custodia-bank-helps-execute-first-bank-issued-stablecoin-transaction-in-us?utm_source=chatgpt.com","children":[{"text":"issue tokenized deposits"}]},{"text":" on a "},{"type":"link","url":"https://cointelegraph.com/learn/articles/permissioned-blockchain-vs-permissionless-blockchain-key-differences?utm_source=chatgpt.com","children":[{"text":"permissionless blockchain"}]},{"text":" in the US with Vantage."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"heading-two","children":[{"text":""}]},{"type":"heading-two","children":[{"text":"Tokenized deposits compete with private stablecoins"}]},{"type":"paragraph","children":[{"text":"The current crypto bull market has been primarily fueled by institutional adoption, with banks and TradFi companies adopting a broad range of strategies to participate in the crypto space."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"One of those areas of adoption has been stablecoins, a now $300 billion market which received a considerable boost by US President Donald Trump’s "},{"type":"link","url":"https://cointelegraph.com/news/donald-trump-stablecoin-law-signed?utm_source=chatgpt.com","children":[{"text":"signing of the GENIUS Act"}]},{"text":" in July."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"However, "},{"type":"link","url":"https://cointelegraph.com/news/us-bankers-want-stablecoin-yield-loophole-closed?utm_source=chatgpt.com","children":[{"text":"banks have expressed concern"}]},{"text":" to regulators that stablecoin issuers and their affiliates offering interest and yield on deposits may undermine the traditional banking system."}]},{"type":"paragraph","children":[{"text":"","bold":true,"italic":true},{"type":"link","url":"https://cointelegraph.com/news/trump-pardons-binance-founder-cz","children":[{"text":"","bold":true,"italic":true}]},{"text":""}]},{"type":"paragraph","children":[{"text":"The US Treasury in April estimated that the stablecoin market could reach "},{"type":"link","url":"https://cointelegraph.com/news/stablecoins-on-track-for-2-t-market-cap-by-2028-us-treasury?utm_source=chatgpt.com","children":[{"text":"$2 trillion by 2028"}]},{"text":" and lead to $6.6 trillion in banking deposit outflows."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"For banks, tokenized deposits could help mitigate these outflows and preserve their competitive edge as the banking industry increasingly moves toward digital solutions."}]},{"type":"paragraph","children":[{"text":""}]},{"type":"heading-two","children":[{"text":""}]},{"type":"heading-two","children":[{"text":"Custodia’s solution is already making a real impact"}]},{"type":"paragraph","children":[{"text":"Custodia is already running early pilot programs that leverage its dollar tokenization technology, including ones that enable cross-border payments for transportation companies and milestone-based disbursements in construction. "}]},{"type":"paragraph","children":[{"text":""}]},{"type":"paragraph","children":[{"text":"It is also supporting supply chain settlement for manufacturers and more flexible payroll options in service industries, it noted."}]},{"type":"paragraph","children":[{"text":"\n"},{"type":"topic","character":"cryptocurrency","children":[{"text":""}]},{"text":" "},{"type":"topic","character":"blockchain","children":[{"text":""}]},{"text":" "},{"type":"topic","character":"Jucom","children":[{"text":""}]},{"text":" "},{"type":"topic","character":"CustodiaBank","children":[{"text":""}]},{"text":" "},{"type":"topic","character":"VantageBank","children":[{"text":""}]},{"text":" "}]}]