Custodia and Vantage Bank have unveiled a token that automatically switches between a traditional bank deposit and a stablecoin as it moves across participating banks and external users.
Token Architecture and Operation
The token functions as a bank‑issued deposit when it resides within the Hazel network, a consortium of banks, and transforms into a cash‑backed stablecoin when transferred outside the network. It is anchored by cash reserves and short‑term Treasury securities, ensuring a 1:1 peg to the U.S. dollar. The system runs on the Ethereum blockchain and has been in a testing phase since March, operating alongside existing core banking ledgers without requiring any infrastructure overhaul.
Projected Rollout and Market Implications
Custodia, based in Wyoming, and Vantage, headquartered in Texas, project that the Hazel network will be widely accessible to banks and their customers by the fourth quarter of 2026. By enabling tokenized payments while keeping deposits on‑bank, the solution offers a bridge for investors and institutions seeking alternatives to conventional stablecoins. If adopted broadly, the token could deepen crypto market integration for community banks and credit unions, potentially expanding the overall blockchain‑based financial ecosystem.