Think of it like a light switch for money. One position: your dollars sit as a traditional, FDIC-insured bank deposit. Flip it: those same dollars become a stablecoin that can move across public blockchain rails. Custodia Bank and Vantage Bank are building exactly that, and they want hundreds of smaller US banks to use it.
The system, operating under what the two banks call the Hazel Network, uses a single ERC-20 token on Ethereum’s mainnet that can function as either a tokenized bank deposit or a compliant stablecoin, depending on context. When the token stays within the member bank network, it behaves like a deposit sitting on the issuing bank’s balance sheet. When it leaves that network, it toggles into stablecoin mode for broader blockchain-based transactions.
How the plumbing actually works
The technical backbone comes from Infinant’s Interlace platform, which handles the programmable logic that determines how the token behaves in different environments. In English: the software decides whether your token acts like a bank deposit or a stablecoin based on where it’s being used.
The key selling point for banks is that customer deposits never leave their balance sheets. Traditional stablecoins like USDC or USDT require reserves to be held by the issuer, effectively pulling deposits away from banks. Custodia and Vantage’s model lets member banks keep those deposits, and the FDIC insurance that comes with them, while still giving customers access to blockchain payment rails.
