Long before the likes of Bitcoin, there were Chuck E. Cheese tokens. The pizza chain introduced its signature coins in the 1970s as a closed-loop currency — usable only inside its own walls, unredeemable for cash, and entirely controlled by the issuer. It was, in its own way, a primitive digital asset. The goals the company was pursuing with these tokens — frictionless transactions, network loyalty, and keeping value in-house — are remarkably similar to the ones driving several community financial institutions (CFIs) into the digital asset space.
A few years ago, most CFIs viewed digital assets largely through the lens of speculative crypto trading, and only a small number chose to explore the space. Today, however, a growing number of institutions are experimenting with digital asset infrastructure for very different reasons: to modernize settlement, strengthen treasury and payment capabilities, compete for commercial clients, and retain deposits in an increasingly fragmented financial system.
While the term “digital assets” encompasses everything from crypto custody and trading to stablecoins, tokenized deposits, and tokenized financial assets, interest among CFIs is increasingly centered on tokenized deposits. Unlike cryptocurrencies, tokenized deposits remain traditional bank deposits — regulated, FDIC-insured, and capable of bearing interest — but represented and transferred on blockchain-based infrastructure.
Here we look at how three of your peers are implementing digital asset initiatives.
Vantage Bank Leads the Way in Tokenized Deposits
Vantage Bank, a Texas CFI with $4.9B in assets, made history in March 2025 when it partnered with Custodia Bank to complete the first-ever tokenization of US dollar demand deposits on a permissionless public blockchain. Vantage handles the fiat reserves and traditional settlement rails, while Custodia manages the blockchain issuance, custody, and reconciliation.
Jeff Sinnott, President and CEO of Vantage Bank said: "This event marks a pivotal moment in reshaping the financial landscape, demonstrating how blockchain and stablecoins can revolutionize payments. By executing this transaction, we're empowering banks to lead responsibly in cross-border modernization, while also leveraging the strength of the US dollar and demonstrating regulators' support for responsible innovation."
In October 2025, the two banks opened the infrastructure up to other CFIs through a consortium model, offering a turnkey platform that integrates tokenized deposits and stablecoins directly into traditional online banking environments. Six months later, Vantage took another step, linking its tokenized deposit network — now operating under the Hazel Network banner — to Participate, a network of about 600 CFIs that digitizes loan participations. The partnership gives those institutions a practical on-ramp to use tokenized deposits in actual loan transactions.
St. Cloud Financial Credit Union Retains its Members with Crypto Custody
St. Cloud Financial Credit Union (SCFCU), a Minnesota CFI with $430MM, entered the digital asset space with a crypto custody solution after many of its members moved their money to crypto exchanges like Coinbase. In fact, by 2025 they had lost $15MM to such exchanges.
Launched in February 2026, SCFCU’s CU-Digital Asset Vault is an integrated platform that lets members hold and manage Bitcoin, Ethereum, and USDC directly within their existing account, with no third-party exchange required.
Retaining control was key for SCFCU. Unlike most crypto partnerships, which hand wallet management — and with it, member data and relationships — to outside providers, the Vault keeps governance at the institution. Members use a hybrid self-custody model while SCFCU adds compliance infrastructure and reporting. Within weeks of launch, members were safeguarding more than 12 Bitcoin alongside smaller amounts of Ethereum and USDC through the platform.
"What we're seeing is members looking for a way to participate without leaving the institution they already trust," says CEO Jed Meyer.
Vast Bank Leverages Blockchain for Cross-Border Payments
In 2021 Vast Bank, an Oklahoma institution with $538MM in assets, became the first nationally-chartered, FDIC-insured CFI to offer in-app crypto trading , letting customers buy, sell, and hold cryptocurrency directly from their bank account. The institution has since shifted away from retail crypto trading toward tokenized deposits focused on cross-border payments, partnering with digital asset platform Uphold and tokenized deposit issuer USBC to move dollar-denominated value across blockchain rails.
The model allows recipients to receive tokenized US dollar deposits redeemable at face value, reducing settlement delays, intermediary costs, and foreign exchange friction. For CFIs serving commercial clients with international operations, the appeal is clear: blockchain-based payment infrastructure can offer faster, lower-cost cross-border capabilities traditionally associated with much larger institutions.
The Bigger Picture
What these institutions share is not a single technology or asset class, but a common strategic challenge: the need to compete in a financial system increasingly shaped by faster payments, programmable money movement, and digital-first platforms. Regulatory developments have helped accelerate experimentation. The GENIUS Act established a federal framework for stablecoins, while the rollback of prior Securities and Exchange Commission crypto custody guidance reduced operational and capital constraints for banks exploring digital asset services.
CFIs have always competed on trust and local relationships. What the current generation of digital asset adoption suggests is that those advantages can extend into new territory — whether that's keeping member deposits in-house, offering real-time payment settlement, or building shared infrastructure that no single institution could afford alone.
