Vantage Bank is implementing blockchain based payment solutions incorporating stablecoins that could reduce cross border transaction costs from $6.78 to 28 cents, a 96% saving, according to CEO Jeff Sinnott speaking at the Federal Reserve Community Bank conference.
The Texas based institution, which has grown from $1.6 billion to nearly $5 billion in assets over six years, is combining stablecoins for international transactions with tokenized deposits for domestic payments. The approach addresses longstanding inefficiencies in correspondent banking, where payments typically move through multiple intermediary institutions.
“When you’re doing cross border payments, correspondent banking is incredibly expensive, incredibly slow, and has a lot of intermediaries that are taking a toll,” Sinnott explained during a discussion with Paxos CEO Charles Cascarilla. By contrast, tokenized payments enable direct bank to bank transfers without intermediaries.
Roughly a third of Vantage’s customers operate internationally, making cross border payment efficiency particularly relevant. The bank is working with partners including Custodia Bank and Paxos to develop the infrastructure. Custodia Bank has a model where a tokenized dollar shapeshifts from a tokenized deposit to a stablecoin and back.
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