Hazel Network's tokenized dollar shifts between bank deposit and stablecoin

Vantage Bank and Custodia release Hazel Network white paper

Vantage Bank and Custodia published a white paper on 18 June 2026 titled "Hazel Network: Unified Tokenized Bank Deposit and Stablecoin Token." The document describes a bank-built token sub-ledger that links traditional banking with tokenized systems such as stablecoins. The two firms designed Hazel Network for banks of all sizes, including community and regional lenders. The companies issued their first tokenized bank deposits together in March 2025 and opened a consortium for banks and credit unions in October 2025. Custodia is a Wyoming-chartered bank and Vantage Bank is based in Texas.

One smart contract issues a dual-character tokenized dollar

At the center of the design sits a single smart contract. It issues a tokenized U.S. dollar that carries two characters at once. Every token begins life as a tokenized deposit issued by a consortium member bank. The same token can act as a stablecoin without a separate conversion transaction. The asset transforms automatically based on who holds it, which the companies say removes conversion costs and friction. This design bypasses crypto exchanges and protects existing bank deposit relationships.

Compliance controls screen every token transfer

Inside the Hazel consortium, the token functions as a tokenized bank deposit with the protections of a member institution. When it moves to an outside holder, it becomes a stablecoin backed at least one-to-one by cash and short-term U.S. Treasury securities. The white paper describes a Compliance by Construction model with three screening layers across fiat, blockchain analytics, and an on-chain sanctions check. Outside the consortium, the stablecoin is designed to meet the proposed GENIUS Act framework.

"Hazel Network delivers payments innovation from within the banking system in a compliant way, and we created it for banks of all sizes – including and especially community banks", 18 June 2026. — Jeff Sinnott, President and CEO, Vantage Bank

Hazel Network has run on Ethereum since March 2026

The reference implementation has been live on the Ethereum mainnet since March 2026. Vantage, Custodia, and their integration partner Infinant completed the first of four required testing phases and plan to begin the second. An announced pilot with Participate uses tokenized deposits for bank-to-bank loan participation closings and servicing. Participate operates a loan participation network with more than 600 banks. The companies said the first group of participating banks will be named soon.

"Today's announcement was six years in the making. Vantage helped us tailor our original design to solve real problems for banks, and we believe this white paper demonstrates why our teams earned the top two spots on American Banker's list of the top 50 Most Innovative People in Finance this year", 18 June 2026. — Caitlin Long, CEO, Custodia

Ethereum trades near $1,700 at time of publication

Ethereum traded at $1,697.42 at the time of publication, down 1.9% over the past 24 hours (NewsFlash, 19 June 2026). The network held a market value near $204 billion. Hazel Network's smart contract runs on this public blockchain rather than a private ledger.

Patents protect the design ahead of a Q4 2026 rollout

The companies said the foundational token design is protected by U.S. Patents 11,392,906, 12,450,578, and 12,579,525, with more patents pending. Vantage Bank and Custodia plan to make Hazel Network fully available to banks and their customers by the fourth quarter of 2026.

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