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Custodia Bank and Vantage Bank have reached an agreement with Participate to use tokenized bank deposits in loan transactions on Participate's network, according to American Banker's March 19 report, which said the development was disclosed by Custodia chief executive Caitlin Long at American Banker's On-Chain Executive Summit. The immediate use case is settlement for loan participations in commercial-and-industrial credits, with Participate described as a network that manages banks' participation in those loans.
Why it matters operationally
The significance is that the payment leg and the asset leg can be moved together inside the loan-participation workflow rather than waiting for conventional wire-based settlement, as Long described at the summit. American Banker also reported that live testing was scheduled for the following week and that multiple banks had been set up as beta testers — indicating the rollout was presented as a live test rather than a fully scaled production deployment.
Building on prior tokenized-deposit work
The announcement builds on prior work by both banks. In March 2025, Custodia and Vantage said they had completed what they described as the first U.S. tokenization of a bank's demand deposits on a permissionless blockchain, issuing, transferring, and redeeming Avit tokens for a bank customer — with Vantage handling fiat reserves and payment rails and Custodia managing issuance, redemption, custody, and reconciliation. In October 2025, the banks announced expanded access to tokenized deposits for community and regional banks nationwide through Custodia's platform and Infinant's Interlace system. Participate, for its part, describes itself as a loan-sales network for financial institutions focused on digitizing loan-participation processes.
Regulatory backdrop
Vantage is an FDIC-insured, state-chartered institution that is a member of the Federal Reserve System, according to FDIC records. In March 2025, the FDIC said supervised institutions could engage in permissible crypto-related activities without prior approval. In March 2026, FDIC Chair Travis Hill said tokenized deposits should receive the same regulatory and deposit-insurance treatment as conventional deposits when they satisfy the statutory definition, while noting that further clarification may still be needed for arrangements involving third parties.
For banks, loan platforms, and regulators, the immediate effect is a live test of tokenized-deposit settlement inside an existing participation network. The report does not indicate any new product launch or change in investor access, but it does point to a shift in how participating banks may settle eligible loan transactions if testing proceeds as described.
