Participate, Vantage Bank & Custodia Announce Groundbreaking First On-Chain Loan Participation Payment Collaboration

The three companies provide a solution to automate institution-to-institution loan sales, servicing and payments using tokenized deposits and stablecoins.

Participate announced a collaboration with Hazel, Vantage Bank and Custodia, providing Hazel with access to a network of more than 600 banks to support what the companies believe will be the world’s first on-chain loan participation collaboration using tokenized deposits for financial institution-to-financial institution payment automation and post-sale servicing.

The collaboration brings together three complementary capabilities: Vantage Bank as the reserve manager, Custodia as the provider of blockchain operations and infrastructure, and Participate as the automation and orchestration layer connecting loan participation workflow, payment instructions, instructing tokenized deposit activity, and post-sale servicing visibility. With this collaboration, borrower payments, reconciliation, transaction details, current balance updates, automated remittance instructions, and movement of tokenized deposits occurs in synchronous fashion in a matter of minutes.

Read More on Fintech : Global Fintech Interview with Baran Ozkan, co-founder & CEO of Flagright

Together, the companies are modernizing a process that has historically relied on manual wires, spreadsheets, email notices, and delayed reconciliations, taking days. The new model is designed to automate loan participation funding and payments while giving authorized parties near real-time visibility into transaction activity, remittances, balances, and servicing updates.

“Financial institutions need sensible use-cases that leverage the fundamental strength of distributed ledger and blockchain,” said Matt Johnner, President and Co-Founder of Participate. “This collaboration applies tokenized deposits and stablecoins to a real banking use case: automating loan participation payments and post-sale servicing in a way that is faster, more transparent, synchronous, and easier for financial institutions to operationalize. Participate is proud to lead the automation layer and orchestration behind this loan participation payment via digital asset breakthrough.”

Under the collaboration, Hazel Network’s tokenized deposit capabilities will enable bank-to-bank movement of funds and settlement in a real-world participation use case.

“Our partnership with Participate addresses a real need for banks today—saving time and eliminating manual tasks. At the same time, it introduces tokenized deposits in a way that feels practical and familiar, helping banks stay ahead and prepared for what’s possible as the industry moves toward a tokenized future” said Shawn Main, Executive Vice President and Chief Business Architect Officer at Vantage Bank.

“Bank-to-bank is an ideal use case for smart contract-based payments and introducing them into Participate’s automated loan participation workflows for both originations and servicing give banks an ideal way to start working with this new technology,” said Caitlin Long, Founder and CEO of Custodia Bank.

For financial institutions, the opportunity is straightforward: automate a traditionally manual process, improve transparency for all parties, and accelerate participation payments and servicing updates from days to minutes.

The post Participate, Vantage Bank & Custodia Announce Groundbreaking First On-Chain Loan Participation Payment Collaboration appeared first on GlobalFinTechSeries.