Participate, a loan sales platform for financial institutions, says it completed the first loan participation payment between banks using tokenized deposits. Texas lenders Vantage Bank and Rio Bank made the payment over the Hazel Network, a tokenized-deposit and stablecoin platform built by Vantage Bank and Custodia. Vantage posted a loan payment in Participate, which split principal and interest and sent the funds to the buyer's digital wallet in under three minutes. Loan balances and notices updated automatically. Such payments usually rely on wires, spreadsheets, and emailed notices, and reconciliation can take days. The payment is the first under a collaboration announced in April 2026. Participate plans to offer the service to its network of more than 750 banks. "Innovation is not just for the big banks or big tech players," said Matt Johnner, Participate's president and co-founder.

Vantage Bank and Custodia have released a white paper detailing the Hazel Network, a bank-architected token system that bridges traditional banking with blockchain technology. The platform features a unified token that automatically transforms between a tokenized bank deposit and a stablecoin depending on who holds it. Inside the banking consortium, the token functions as an FDIC-insured bank deposit. Outside the consortium, it operates as a GENIUS Act-compliant stablecoin backed by liquid assets. This design eliminates conversion friction and protects customer-bank relationships. The network includes three-layer compliance screening covering anti-money laundering, blockchain analytics and on-chain sanctions checks. Banks can integrate through three models, with the quickest requiring four to six weeks implementation. The reference implementation went live on Ethereum mainnet in March 2026, with full availability scheduled for Q4 2026.