Custodia Bank’s Tokenized Deposits to Power Loan Trading Network of More Than 600 Banks

Loan participation transactions allow multiple banks to hold portions of the same corporate loan, but funding, principal and interest payments, and reconciliation have long relied on wire transfers, spreadsheets and email, with settlement often taking several days. Custodia Bank, Vantage Bank and Participate are therefore introducing onchain tokens representing bank deposits, enabling loan assets and payments to settle simultaneously while preserving the regulated deposit structure.

Custodia CEO Caitlin Long disclosed the partnership on March 19, 2026, with several banks initially scheduled to begin testing by the end of March. Participate, Vantage Bank and Custodia formally announced the initiative on April 7, saying it would cover more than 600 banks. The system uses the Ethereum mainnet and the ERC-20 standard and aims to reduce a process that once took days to just minutes. The value of the initial transactions has not been disclosed.