Custodia Bank

Market position

Custodia was one of four SPDIs chartered in Wyoming and is described as an American bank specializing in cryptocurrency. It and Vantage Bank claim to have issued America's first bank-issued stablecoin on a permissionless blockchain and to have launched tokenized deposits for U.S. banks. Its lack of a Federal Reserve master account has constrained its position relative to conventional banks; it has accessed the Federal Reserve payment network indirectly via other banks.

Positioning as a regulated depository institution rather than a non-bank crypto firm: a Wyoming SPDI charter with 100% reserve requirements and no lending of fiat deposits, combined with on-chain issuance of a token that functions as both a tokenized bank deposit within a bank consortium and a payment stablecoin outside it, with compliance controls enforced in smart-contract code. The company also cites SOC 2 Type II certification and a patent on bank-issued stablecoins.

Technology

Avit smart contracts deployed on Ethereum, with wallet provisioning for member banks, mint/burn functions, freeze capability, sanctions screening and on-chain monitoring. Settlement, compliance and operational controls, including consortium membership rules and reserve caps, are enforced programmatically in code, supporting 24/7/365 programmable settlement via a bank-architected token sub-ledger. The company has also cited API-based real-time payments and Bitcoin custody platforms, and holds a patent on bank-issued stablecoins. A third-party profile lists web technologies including Cloudflare, AWS, Next.js, React and Node.js.

Go-to-market

Custodia goes to market through partnership with a chartered commercial bank, Vantage Bank, jointly operating and promoting the Hazel Network to banks and credit unions, including publication of a technical white paper in June 2026. It also uses press releases, public policy advocacy and litigation-related communications to reach industry and regulatory audiences, and directs prospective customers to inbound contact channels.

Member financial institutions of the Hazel Network, including banks and credit unions, plus institutional digital-asset holders requiring custody and access to U.S. dollar payment rails.

Geography

Headquartered in Cheyenne, Wyoming, United States, with the Wyoming charter as its regulatory base; the Wikipedia entry lists Wyoming as the area served. Custodia operates as Custodia Digital Services in certain U.S. states and states it is not recognized as a bank in Maryland. Its Hazel Network partner Vantage Bank is based in San Antonio, Texas.

History

Founded in 2020 as Avanti Bank & Trust; in October 2020 the Wyoming State Banking Board unanimously granted it an SPDI charter and approved its business plan for digital asset custody and a tokenized U.S. dollar. The company raised a $37 million Series A in 2020 ahead of its planned bank launch, applied for Federal Reserve membership and FDIC insurance, and rebranded from Avanti to Custodia in 2021 with a launch countdown for Q2 2022. It sued the Federal Reserve Board and the Federal Reserve Bank of Kansas City in June 2022 over delay of its master account application; the Board denied the application in January 2023 citing significant safety and soundness risks. A district court ruled against Custodia in March 2024 and the company appealed to the U.S. Court of Appeals for the Tenth Circuit, with oral argument scheduled for January 21, 2025. In August 2024 it cut roughly 25% of its 36-person workforce, and in November 2024 its board voted to further reduce operations to preserve capital while retaining its charter, platforms, patent and compliance record. By 2025 it was described as largely dormant. In 2026 the company presented itself as the blockchain infrastructure provider for the Hazel Network, launched with Vantage Bank, with a joint white paper released in June 2026.

Risks & controversies

Custodia's Federal Reserve master account and membership application was denied in January 2023 over what the Board called significant safety and soundness risks; regulators and industry groups including the American Bankers Association and the Wyoming Bankers Association have opposed granting access, citing money laundering and financial stability concerns, the absence of FDIC insurance, acceptance of crypto assets as deposits, and its fee-based model. A court ruled against the bank in March 2024 and the appeal was pending into 2025. The company reported repeated debankings, laid off about a quarter of its staff in 2024 and reduced operations to preserve capital; Wikipedia describes it as largely dormant as of 2025. Critics quoted in press coverage argue Wyoming's enabling laws favored large crypto players. The company is not recognized as a bank in Maryland and its offerings are not FDIC insured.