{"id":11306,"date":"2025-03-27T08:38:03","date_gmt":"2025-03-27T15:38:03","guid":{"rendered":"https:\/\/jasonsblog.ddns.net\/?p=11306"},"modified":"2025-03-27T08:39:51","modified_gmt":"2025-03-27T15:39:51","slug":"wyoming-based-custodia-bank-is-first-to-send-receive-digital-u-s-dollars","status":"publish","type":"post","link":"https:\/\/jasonsblog.ddns.net\/index.php\/2025\/03\/27\/wyoming-based-custodia-bank-is-first-to-send-receive-digital-u-s-dollars\/","title":{"rendered":"Wyoming-Based Custodia Bank Is First To Send, Receive Digital U.S. Dollars"},"content":{"rendered":"\n

Looks like they’ll use this new stablecoin Avit based on cash deposits for completing transactions digitally on the Ethereum blockchain, and then back to fiat as a work around for the expensive and slow wire transfer monopoly. It’s been suggested that a lot of stablecoins will pop up with some being backed by US debt, which will lead to a major crash, though prop up the broke US for a while. I personally wouldn’t hold Ethereum since they moved from proof of work to a proof of stake system. The idea is people stake capital to be validators, but the OCGFC could easily sacrifice their stakes to corrupt transactions and bring the network down. Since this system flows in and out quickly, not too much of a risk for these transactions for now. And Ethereum once reversed transactions for a flawed smart contract system that was hacked, so a willingness exists to undo transactions if properly motivated. Something that wouldn’t happen with Bitcoin<\/a>.<\/p>\n\n\n\n

https:\/\/cowboystatedaily.com\/2025\/03\/26\/wyoming-based-custodia-bank-becomes-first-to-send-receive-digital-u-s-dollars\/<\/a><\/p>\n\n\n

<\/div><\/div><\/div>\n\n\n
Wyoming-based Custodia Bank, working with a Texas bank, has successfully sent tokenized digital U.S. dollars from an account into the digital realm and back again. The transaction is the first of its kind.<\/h5>\n\n\n\n

By Ren\u00e9e Jean<\/p>\n\n\n\n

\"Wyoming-based
Wyoming-based Custodia Bank, working with a Texas bank, has successfully sent U.S. dollars from an account into the digital realm and back again. The transaction is the first of its kind, says Caitlin Long, Custodia CEO. (Matt Idler for Cowboy State Daily)<\/figcaption><\/figure>\n\n\n\n

While it took a Texas partner to help make it happen, Wyoming has racked up another first for its digital asset sector \u2014 and managed to beat a number of much larger New York banks to the punch.<\/p>\n\n\n\n

Multiple large New York banks have recently announced plans for stable tokens for U.S. dollars to travel to and from the digital world, riding on the heels of a newly installed and crypto-friendly Trump administration. <\/p>\n\n\n\n

In fact, the Trump family\u2019s World Liberty Financial announced similar plans Tuesday, working with a Texas bank.<\/p>\n\n\n\n

But Wyoming-based Custodia Bank has beaten them all to the punch. <\/p>\n\n\n\n

Working in partnership with Texas community bank Vantage Bank, Custodia Bank completed a series of eight transactions that tokenized U.S. dollars using its patented Avit stablecoin. <\/p>\n\n\n\n

The money was sent out into the digital world onto the Ethereum platform and back again in a 100% regulatory-compliant manner, Custodia Bank CEO Caitlin Long told Cowboy State Daily. <\/p>\n\n\n\n

\u201cWe beat the big banks to the market, which I don\u2019t think many in the banking industry were expecting, given recent statements by the big New York banks,\u201d she said. \u201cI do lament that it was a Texas community bank, and not a Wyoming community bank, that approached us to do this first. But this has been part of Custodia\u2019s business plan since 2020.\u201d<\/p>\n\n\n\n

The accomplishment is notable given that Custodia Bank is still fighting a legal battle<\/a> for its master account, which is a bank account for banks that gives them access to Federal Reserve services. <\/p>\n\n\n\n

Custodia Bank\u2019s partner, Vantage, handled the master account aspect of the transaction, while Custodia Bank provided the digital railway for that cash to both enter and leave the Ethereum blockchain. <\/p>\n\n\n\n

The money was transferred into self-custody using Avit tokens for several business-to-business transactions outside the banking system, which were recorded on the Ethereum blockchain, then transferred back to Custodia Bank for redemption into a U.S. bank deposit.<\/p>\n\n\n\n

\"Custodia
(Cowboy State Daily Staff)<\/figcaption><\/figure>\n\n\n\n

Why Go There<\/strong><\/h2>\n\n\n\n

Long said Custodia Bank was approached by Vantage Bank because it has customers who want to be able to onboard U.S. cash onto cryptocurrency platforms and then redeposit the remaining or net funds once their business has concluded.<\/p>\n\n\n\n

\u201cThe banks complied with all applicable U.S. bank regulatory requirements, including BSA\/AML\/OFAC,\u201d Long said. \u201cThat necessitated designing documentation, policies and procedures that differ from those of current stablecoin issuers. Both banks worked with their respective bank regulators to ensure the success of this first-of-its-kind project.\u201d<\/p>\n\n\n\n

The string of acronyms refer to the Bank Secrecy Act\/Anti-Money Laundering\/Office of Foreign Assets Control.<\/p>\n\n\n\n

Despite complying with rules intended to prevent money laundering or other illegal activities, Long\u2019s patented approach still proved much faster and much cheaper than a federal wire transaction normally is. <\/p>\n\n\n\n

\u201cWe did eight transactions within the span of a couple of hours, and they were all programmable,\u201d Long said. \u201cThey could have been driven by software, rather than human intervention. That\u2019s so much faster and more programmable than any existing payment solution, and the highest fee on our transactions was 25 cents.\u201d<\/p>\n\n\n\n

A typical fed wire transaction would cost more like $30 to $35 per transaction, Long said, and most ACH transactions take between one to three days. That means it would take a minimum of eight days to accomplish eight transactions. <\/p>\n\n\n\n

\u201cThis event marks a pivotal moment in reshaping the financial landscape, demonstrating how blockchain and stablecoins can revolutionize payments,\u201d Vantage Bank President and CEO Jeff Sinnott said. \u201cBy executing this transaction, we\u2019re empowering banks to lead responsibly in cross-border modernization, while also leveraging the strength of the U.S. dollar and demonstrating regulators\u2019 support for responsible innovation.\u201d<\/p>\n\n\n\n

Community Banks Are Natural Innovators<\/strong><\/h2>\n\n\n\n

The entire process was also more secure, Long said, because of the technology that Vantage has invested in.<\/p>\n\n\n\n

\u201cThat was important to us because these older, two-factor authentication technologies like SMS aren\u2019t secure,\u201d Long said. \u201cA lot of people in the crypto space have had phones taken over in sim swaps, because people figured out, during the early years, that people in crypto were holding their wallets in insecure, two-factor authentication wallets on their phone.\u201d<\/p>\n\n\n\n

The way a sim-swap works is a thief impersonates the owner with Verizon, AT&T, or some other provider, taking over the phone. <\/p>\n\n\n\n

Investing in technology to make transactions more secure is key, Long believes, to long-term success for this new digital technology which promises cheaper, faster transactions.<\/p>\n\n\n\n

The fact that it is smaller banks achieving this kind of innovation ahead of much larger banks is not something that surprises Long. Small banks are more agile and can move faster. Throughout history, that\u2019s enabled them to be innovative, Long said.<\/p>\n\n\n\n

\u201cBank of America and Goldman Sachs \u2014 some of the biggest banks in the country are going to do this. And the first one out the door is a Wyoming bank, working with a community bank in Texas,\u201d she said. \u201cAnd this bank in Texas isn\u2019t much bigger than Wyoming banks. So that\u2019s an interesting fact in and of itself. It shows you we\u2019re more nimble, we\u2019re more agile, and we can move faster.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Looks like they’ll use this new stablecoin Avit based on cash deposits for completing transactions digitally on the Ethereum blockchain, and then back to fiat as a work around for the expensive and slow wire transfer monopoly. It’s been suggested that a lot of stablecoins will pop up with some being backed by US debt, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,7],"tags":[],"class_list":["post-11306","post","type-post","status-publish","format-standard","hentry","category-tech","category-world"],"blocksy_meta":[],"featured_image_src":null,"author_info":{"display_name":"Jason","author_link":"https:\/\/jasonsblog.ddns.net\/index.php\/author\/jturning\/"},"_links":{"self":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/comments?post=11306"}],"version-history":[{"count":3,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11306\/revisions"}],"predecessor-version":[{"id":11309,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11306\/revisions\/11309"}],"wp:attachment":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/media?parent=11306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/categories?post=11306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/tags?post=11306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}