When Shawn Main, executive vice president at $5.4 billion-asset Vantage Bank, addressed the American Banker Small Business Banking conference in November 2026, he delivered a message that would be uncomfortable for any financial services firm without a banking license: even institutions with regulatory approval, balance-sheet capacity, and decades of operational experience cannot independently develop the payment rails required for digital asset settlement.
"For community and regional banks, it's very important that we all come together," Main told attendees, explaining why Vantage partnered with Custodia Bank to create a shared infrastructure network rather than building proprietary systems. The comment was not a sales pitch, it was an admission of structural constraint. Vantage is a licensed, FDIC-insured bank with nearly a century of operating history and half a billion dollars in equity capital. If an institution with those resources concludes that going it alone is operationally impractical, the calculus for an unlicensed broker is considerably worse.
The technical hurdle is payment connectivity. Stablecoins and tokenized deposits are not useful for commercial settlement unless they can reliably convert to fiat currency within the regulated banking system. That conversion requires integration with Fedwire, real-time payment networks, correspondent banking relationships, and three-layered compliance screening for anti-money laundering, blockchain analytics, and sanctions enforcement. These are not features a firm can acquire through a vendor contract; they flow from a banking charter and the regulatory standing that accompanies it.
This is why Main and his counterparts at Thread Bank, a community institution in eastern Tennessee, emphasised the distinction between building, buying, and partnering. Amanda Coleman, Thread Bank's head of embedded deposit partnerships, framed the calculation bluntly: "You should build when you have the people, the technology, and the funds. Especially when you already have the customers and you can do those other pieces correctly." The inverse is obvious, if any of those preconditions is missing, the build option is off the table. For an unregulated crypto broker, all three are typically absent.
The infrastructure gap is not theoretical. McKinsey and Artemis Analytics found that actual stablecoin payment volume, vendor invoices, cross-border remittances, payroll disbursements, and card transactions, totalled approximately $390 billion in 2025, having more than doubled from the prior year. But that figure represents roughly one percent of reported stablecoin transaction volume; the other ninety-nine percent is internal transfers, trading activity, and automated smart contract loops. The implication is that for stablecoins to become commercially relevant, they must connect to the payment infrastructure that licensed banks control. That infrastructure is precisely what community banks themselves are struggling to access.
Vantage's response to this problem was to co-develop the Hazel Network, a tokenised-deposit platform designed for community banks and credit unions. The system allows a single token to function as an FDIC-insured bank deposit when held within a consortium of participating institutions and as a GENIUS Act-compliant stablecoin when transferred outside the network. The reference implementation went live on Ethereum mainnet in March 2026, with broader availability targeted for the fourth quarter. Participate, a loan syndication network with more than 750 member banks, announced in April that it would begin offering access to Hazel's tokenised-deposit rails for loan participation payments, a signal that the infrastructure is being treated as production-grade by peer institutions.
The regulatory backdrop makes timing critical. The GENIUS Act, signed into law in July 2025, established the first comprehensive federal framework for payment stablecoins in the United States. Beginning January 2027, it becomes unlawful for digital asset service providers to offer or sell payment stablecoins to US persons unless those stablecoins are issued by a permitted payment stablecoin issuer, a category that includes federally or state-licensed depository institutions and non-bank entities that meet specific reserve, disclosure, and audit requirements. The law's implementing regulations, proposed by the Office of the Comptroller of the Currency in August 2026, confirm that the compliance clock is running.
For unregulated crypto brokers, the operational implications are severe. Holding client funds, executing trades, and settling transactions all require infrastructure that routes through licensed financial institutions. Without that routing, a broker cannot legally process a dollar-denominated stablecoin transaction for a US counterparty once enforcement begins. The path to compliance is not incremental improvement, it requires operating under a regulatory umbrella that the broker does not possess and cannot obtain within the relevant timeframe.
The conference remarks from Vantage and Thread Bank expose a structural asymmetry in the digital asset market. Regulated institutions can collaborate to share infrastructure costs and compliance burdens while preserving their competitive customer relationships. Unregulated firms have no such option. They are not positioned to join a banking consortium, and they lack the charter status that would allow them to develop equivalent capabilities independently.
Main summarised the strategic position in terms that apply equally to banks and to the brokers watching from outside the system: "If you truly believe that everything is going to be tokenised, capital markets, real-world assets, et cetera, then if you want to play in that sandbox, you have to have access to these rails and to this technology. The best way to do that for most community banks is to join a network."
The qualifier matters. Main said the best way for community banks is to join a network. For unlicensed brokers, the network option is foreclosed. The only remaining path is to operate under someone else's licence.
References
[1] McKinsey & Company, "Stablecoins in payments: What the raw transaction numbers miss,"
[2] Sidley Austin LLP, "The GENIUS Act: A Framework for U.S. Stablecoin Issuance,"
[3] Federal Register, "GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale,"
