Vantage Bank and Rio Bank completed a loan participation payment with Hazel Network tokenized deposits on Ethereum. Participate says the funds reached the receiving bank's wallet in under three minutes. The announcement leaves out the payment amount and the deposit issuer.
Vantage Bank and Rio Bank completed a loan participation principal-and-interest payment using Hazel Network tokenized deposits through Participate's loan-servicing platform. The software company announced the payment on Oct. 19. According to Custodia CEO Caitlin Long, the venue was "Ethereum mainnet."
Payment lands in under three minutes
Participate said Vantage posted the payment, the platform allocated principal and interest, and the tokenized deposits reached the receiving institution's digital wallet in less than three minutes. Loan balances and payment notices updated automatically alongside the transfer. That work traditionally involved wires, spreadsheets and emailed notices.
In a loan participation, one bank makes a loan and sells slices of it to other banks. The deal was framed as the world's first interbank loan participation or syndication principal-and-interest payment made with tokenized deposits.
Public chain, bank-controlled settlement
Vantage and Custodia developed Hazel. Participate, a BankLabs company, supplies the loan workflow, Vantage supplies banking services and reserves, and Custodia handles wallets, compliance and reconciliation monitoring, according to the announcement.
The banks' white paper describes a model with both onchain and conventional bank records. Custodia's authorized operator signs a token transfer between member addresses, and Vantage's general ledger reconciles at day-end. According to the white paper, only onboarded participants can transact on the public blockchain, and customer identities stay offchain.
What the announcement leaves out
The announcement did not identify the deposit issuer, publish a transaction hash or disclose the payment amount, the underlying loan size or the execution date. Participate says this is the first completed payment under the April collaboration.
Participate also plans to offer tokenized-deposit and Fedwire payment automation to 750 banks for participation and syndication payments.
Sources: The Defiant, Crypto Briefing
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