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Community banks test tokenized deposits and stablecoins to cut costs and offer programmable payments
Summary
Vantage Bank and industry partners described pilots using tokenized deposits and stablecoins to enable event‑triggered payments and slash cross‑border costs, while stressing ongoing regulator engagement and attention to smart‑contract and counterparty risks.
Jeff Sinnett, president and CEO of Vantage Bank, told a public panel that his bank has been methodically building blockchain‑based capabilities for several years and running pilots with regulators nearly every other week. Sinnett said Vantage has originated loans on the blockchain and moved toward tokenized deposits to create new payment rails and treasury services for small and midsize customers.
"We put loans on the blockchain," Sinnett said, describing a proprietary loan origination flow that can be tokenized to allow more efficient syndication and secondary sales. He said Vantage’s pilots included a trucking payroll proof of concept that paid drivers automatically when a truck arrived at a warehouse, and an effort with a commercial builder to pay subcontractors at the inspection desk.
Sinnett gave a concrete cost comparison for an international transaction that routed between tokenized deposit and a stablecoin: "It cost us 28 cents," he said, versus about $6.78 for a typical international wire on existing rails. He and other panelists argued those savings, and programmability, could help community banks offer differentiated services that large banks do not provide as nimbly.
Sinnett said Vantage has shared risk assessments with state and federal supervisors and met regularly with regulators while developing proofs of concept. He urged community banks to form cross‑functional teams, run small tests and partner with infrastructure providers so smaller institutions can participate without building everything in house.
Panelists acknowledged risks. Sinnett pointed to smart‑contract placement and education, counterparty risk when moving outside insured U.S. bank rails, and the need to pick appropriate blockchain protocols. He said tokenized deposits can be implemented under current oversight and can remain within the insured banking system when structured that way.
The panel also discussed an upcoming sandbox that Vantage plans to open to invite other community banks to participate in experiments. Sinnett said the overarching goal is to help community banks "punch above our weight" and unlock new revenue and customer retention opportunities by integrating programmable rails into core customer workflows.
The session closed with applause and an invitation for further questions at follow‑up meetings.
