The Ethereum-based system, branded as the Hazel network, has been running in a testing phase since March. According to a white paper released on June 18, the token alters its legal status based on its location: inside the consortium, it represents a direct liability of the issuing institution, while external movement triggers a conversion into a stablecoin backed by cash and U.S. Treasury securities. The companies intend to roll out this infrastructure to banks and credit unions by the fourth quarter of 2026.
This initiative arrives as legacy financial institutions grapple with the rapid expansion of the stablecoin market, which has grown to approximately $315 billion. By integrating blockchain capabilities into existing core banking software rather than replacing it, Custodia and Vantage aim to provide smaller institutions with a pathway to digital asset payments without ceding control of deposits to third-party issuers. The project marks a significant strategic push for Custodia, which has spent years navigating regulatory hurdles, including a failed legal challenge to secure a Federal Reserve master account.
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