A new banking blockchain solution has been introduced in the U.S. that allows a token to automatically change its form depending on where it is held. Within a consortium ecosystem, the token is treated as a bank deposit. Outside that ecosystem, it converts into a stablecoin.
Vantage Bank and Custodia unveiled Hazel Network, a banking blockchain infrastructure that combines tokenized deposits and stablecoins within a single instrument and enables 24/7 settlement, including weekends and holidays. Full availability for banks and their customers is scheduled for the fourth quarter of 2026.
Hazel Network is positioned as a new digital subledger that operates alongside a bank’s existing core banking system and accounting ledger without requiring either to be replaced. The platform offers three integration options, with the fastest implementation path taking just 4 to 6 weeks.
The network’s defining feature is a single smart contract that issues a tokenized U.S. dollar with a dual nature:
- Within the consortium, the token represents a tokenized deposit issued by the originating bank and carries the corresponding obligations and protections, including FDIC insurance.
- Outside the consortium, it functions as a stablecoin that is expected to comply with the GENIUS Act and be backed at no less than a 1:1 ratio by liquid assets, including cash and short-term U.S. Treasury securities.
According to the developers, the system doesn’t require a separate conversion process between deposits and stablecoins. Instead, the token automatically transforms when it moves beyond the consortium ecosystem. The mechanism is intended to eliminate reliance on crypto exchanges, reduce conversion costs and settlement friction, preserve direct bank-customer relationships, and prevent the outflow of core deposits.
The project places a strong emphasis on compliance. Hazel Network uses a Compliance by Construction framework under which every transaction passes through three layers of review before execution on a blockchain network:
- screening of fiat transactions for money laundering indicators, fraud risks, and sanctions concerns;
- blockchain analytics with automated wallet and address assessments;
- on-chain sanctions screening through a dedicated sanctions oracle.
In addition, the smart contract automatically blocks transfers outside the consortium if they could exceed Custodia’s programmatically verified reserve balance.
The project is designed for banks and credit unions of all sizes, including small regional financial institutions. Hazel Network already has a functioning reference implementation on the Ethereum mainnet, where it has been operating since March 2026. Vantage, Custodia, and their integration partner Infinant completed the first of four production-scale testing phases and are preparing for the second.
The companies also said that the first group of participating banks will be announced soon. Several large-scale pilot projects are already underway. One of them involves Participate and the use of tokenized bank deposits to facilitate the closing and servicing of interbank loan participation transactions.
The launch comes as stablecoin integration into the traditional banking system continues to gain momentum across the U.S., including among local and regional financial institutions. In 2026, Stablecore joined the Jack Henry Fintech Integration Network (FIN), giving approximately 2,670 banks, credit unions, and other financial institutions across the U.S. access to stablecoin and digital asset solutions.
