The US Commodity Futures Trading Commission (CFTC) has brought its case against Alex Mashinsky to a close, issuing an order that permanently bars the Celsius Network founder from trading in markets the agency oversees. The decision also prevents him from ever registering with the CFTC and ends the enforcement action the CFTC initiated in 2023.

In a statement issued Thursday, the CFTC said the resolution was formalized through a court consent order. The regulator stated that Mashinsky and Celsius “engaged in a scheme to defraud hundreds of thousands of customers” by allegedly misrepresenting the safety, profitability, and regulatory compliance of Celsius’ digital asset-based finance platform. The order means Mashinsky will be unable to participate in US commodities, futures, and derivatives trading subject to CFTC jurisdiction.

Key takeaways

• The CFTC permanently bars Alex Mashinsky from trading US commodities, futures, and derivatives regulated by the agency.
• The settlement also prohibits him from ever registering with the CFTC, effectively closing off a key regulatory pathway.
• The order ends the CFTC enforcement action launched in 2023 and resolves one of the last CFTC matters still pending against him.
• Mashinsky remains in ongoing legal proceedings, including a separate SEC case tied to Celsius token and business disclosures.

What the CFTC order changes for Mashinsky

The CFTC’s consent resolution is significant because it does more than stop a single activity. By permanently banning Mashinsky from trading in CFTC-regulated markets, the regulator removes his ability to engage in a wide range of derivatives and commodities-linked conduct that can intersect with crypto markets.

The agency also said the order bars him from registering with the CFTC in the future. While the practical meaning of registration requirements can vary by role, the prohibition signals the CFTC intends to permanently restrict Mashinsky’s involvement in regulated market activities tied to the commodities framework.

The CFTC’s Thursday announcement closes the book on an enforcement action that began in 2023. The regulator characterized the alleged misconduct as a broad scheme impacting a large customer base, rather than a narrow dispute about a particular instrument or disclosure.

Why the case matters for crypto regulation

This development lands at a time when the US regulatory line for crypto is increasingly shaped by distinctions between commodities and securities. Earlier in 2024, the CFTC and the US Securities and Exchange Commission (SEC) issued guidance stating they viewed most major cryptocurrencies as commodities, a position that has influenced how different parts of the crypto market are supervised.

Because Mashinsky’s ban applies to commodities-related trading, it reinforces how enforcement built on commodities jurisdiction can still lead to severe restrictions—even after other agencies’ actions. In Mashinsky’s situation, the CFTC is effectively adding another layer to a regulatory record that already limits him across multiple financial and crypto-related activities.

The CFTC also noted that the resolution marks the end of its first case against a digital asset lending platform. For market participants, that matters because lending firms have historically occupied a gray area between token trading, broker-like activities, custody-adjacent services, and interest-bearing products—areas regulators have targeted through different legal theories.

Sentencing and the alleged Celsius conduct

Separate from the CFTC settlement, Mashinsky was sentenced to 12 years in prison in May 2025 after pleading guilty to securities and commodities fraud. The plea involved allegations that he misled Celsius customers about the safety of the platform before it collapsed during the 2022 market downturn.

The CFTC’s complaint alleged that Celsius received roughly $20 billion in funds and made risky investments to meet the returns it promised. Although the CFTC’s Thursday statement focuses on the consent order’s terms, those allegations provide the backdrop for why the agency viewed the conduct as a customer-facing scheme tied to regulatory obligations and market risk.

For investors and users, Celsius remains a cautionary reference point in how yield products can be marketed and structured—and how the failure of underlying liquidity and risk controls can collide with regulatory scrutiny after a drawdown.

Other legal pressure still ongoing

The CFTC settlement does not end all of Mashinsky’s legal challenges. He is already subject to a permanent work ban connected to a Federal Trade Commission complaint filed earlier, which barred him from working with any product or service that can be used to “deposit, exchange, invest, or withdraw assets” after a settlement reported in April.

Meanwhile, the SEC’s case filed in July 2023 remains active. The SEC accused Mashinsky of making an unregistered securities offering, misrepresenting Celsius’ business and safety, and manipulating the price of Celsius (CEL) token. In late May, the SEC told a federal court that it had “engaged in substantive settlement discussions” with Mashinsky, but that no agreement had been reached. The court granted the regulators another 60 days to continue discussions.

Mashinsky has also challenged the criminal sentence. On May 26, he filed a motion seeking to vacate the 12-year term, alleging ineffective assistance of counsel, that evidence was tainted by authorities’ misconduct, and that Sam Bankman-Fried—described in the filing as the convicted fraudster and former FTX co-founder—was responsible for CEL token manipulation. A court ordered prosecutors to respond to the motion by mid-August.

Together, these proceedings show a complex enforcement footprint across multiple regulators and case tracks: CFTC sanctions closing commodities-related activity; SEC litigation over token and securities-related claims; and continued criminal review of the sentence.

As the SEC’s settlement discussions progress and the court schedules responses on Mashinsky’s bid to vacate his sentence, market participants should watch whether any resolution narrows the scope of pending claims, and what—if anything—changes in how regulators treat crypto-linked lending, customer-yield promotions, and token price conduct under different legal frameworks.

The Ethereum Foundation has lost another high-ranking contributor, amid increasing scrutiny of the research organization as the network faces ongoing questions about talent retention and governance philosophy.

In a post on X, co-executive director Hsiao-Wei Wang announced that she had stepped down from her role, effective immediately, following a recent sabbatical. Wang wrote that “Ethereum has always been bigger than any role” and indicated that she has not yet decided what she will do next.

Ethereum co-founder Vitalik Buterin commented on Wang’s an X post, acknowledging that she had taken on “the most challenging position in the Ethereum Foundation” alongside Tomasz Stanczak, who also stepped down from his leadership role earlier this year.

Source: Vitalik Buterin

The Ethereum Foundation has logged an estimated 19 layoffs and departures this year, although the loss of senior executives and core contributors has drawn the most attention. The wave of departures comes as the foundation grapples with intensifying competition, ongoing debate over Ethereum’s governance and long-term development strategy, and continued pressure on Ether’s market performance.

Buterin has also pushed back against criticism, particularly claims that the foundation should play a more active role in promoting the network. In May, he said that the foundation “is not the ‘center of Ethereum,’ rather […] ‘one node, with a defined purpose, alongside other nodes.’”

Related: Blockchain researcher defends Ethereum Foundation, says it’s doing ‘exactly’ its job

Decentralization remains Ethereum Foundation’s core mandate

In March, the Ethereum Foundation reaffirmed its role as a steward of the Ethereum ecosystem, unveiling a revised mandate that places even greater emphasis on decentralization.

“Our ultimate goal is for Ethereum to pass the walkaway test: its protocol and core application layers become robust and trustless enough that they would continue to reliably function and evolve even if the Foundation and today’s core developers disappeared tomorrow,” the foundation said.

Source: Ethereum Foundation

That philosophy has also shaped Buterin’s evolving stance on Ethereum layer-2 networks — the independent blockchains built on top of Ethereum to improve scalability and reduce transaction costs. 

Buterin recently stated that the original vision for layer-2s “no longer makes sense,” contending that many have failed to achieve meaningful decentralization and that improvements to the Ethereum mainnet make it a more suitable long-term scaling solution.

Magazine: Ethereum’s roadmap to 10,000 TPS using ZK tech: Dummies’ guide

TLDR

• BlackRock now ranks as the world’s third-largest Bitcoin holder, according to Arkham data.
• The asset manager reportedly holds about 764,000 BTC.
• Only Satoshi Nakamoto and Coinbase hold more Bitcoin than BlackRock.
• BlackRock moved ahead of Binance, which holds around 670,000 BTC.
• Strategy reports total Bitcoin holdings of 847,000 BTC.

BlackRock now ranks as the third-largest Bitcoin holder globally, according to data released by Arkham. The asset manager holds about 764,000 BTC, placing it behind only Satoshi Nakamoto and Coinbase. The ranking has sparked discussion because Strategy reports total Bitcoin holdings of 847,000 BTC.

BlackRock Moves Ahead of Binance in Bitcoin Rankings

Arkham’s latest data places BlackRock among the largest Bitcoin-holding entities worldwide. The report estimates that BlackRock controls around 764,000 BTC through its Bitcoin-related products and holdings. Meanwhile, Satoshi Nakamoto remains the largest holder with 1,096,000 BTC, while Coinbase holds about 970,000 BTC.

The ranking also places BlackRock ahead of Binance. According to Arkham’s figures, Binance accounts for roughly 670,000 BTC. As a result, BlackRock moved above the exchange in the latest list of major Bitcoin holders.

Discussion emerged after the report circulated across the crypto sector. Some market participants questioned BlackRock’s position because Strategy reports larger overall Bitcoin reserves. However, Arkham’s methodology focused on Bitcoin directly attributed to each entity profile.

Why BlackRock Ranked Above Strategy

Strategy remains the largest publicly traded corporate Bitcoin holder. The company reports total Bitcoin holdings of 847,000 BTC. On the surface, that figure exceeds BlackRock’s reported 764,000 BTC position.

However, Arkham explained why its ranking placed BlackRock ahead. The report stated that part of Strategy’s Bitcoin remains under custodial arrangements. Therefore, not all holdings appear directly under Strategy’s entity profile.

Arkham reported that about 184,000 BTC from Strategy’s total holdings sit with Fidelity Custody. After accounting for those custodial holdings, approximately 663,000 BTC remain directly associated with Strategy’s profile. That figure falls below BlackRock’s reported 764,000 BTC.

The distinction became central to the ranking debate. Arkham based its list on Bitcoin linked directly to entity profiles rather than total reported ownership. Consequently, BlackRock secured the third position despite Strategy’s larger disclosed Bitcoin reserves.

Arkham Details the Bitcoin Holder Breakdown

The report outlined a clear hierarchy among the largest Bitcoin holders. Satoshi Nakamoto leads with 1,096,000 BTC, while Coinbase follows with 970,000 BTC. BlackRock ranks third with approximately 764,000 BTC under Arkham’s calculations.

Binance follows BlackRock with around 670,000 BTC. Strategy appears below BlackRock when custodial holdings receive separate treatment. The ranking reflects Arkham’s tracking approach rather than publicly reported corporate ownership figures.

Arkham stated that BlackRock’s holdings exceed those directly attributed to Strategy’s profile. The data also shows BlackRock maintaining a larger Bitcoin balance than Binance. Those figures currently place the asset manager as the world’s third-largest Bitcoin holder.

The US Commodity Futures Trading Commission has resolved its action against Celsius Network founder Alex Mashinsky, permanently banning him from trading in markets the commodities regulator oversees.

The CFTC said Thursday that a court consent order also bars Mashinsky from ever registering with the regulator and ends the enforcement action it first filed in 2023.

“Mashinsky and Celsius engaged in a scheme to defraud hundreds of thousands of customers by mispresenting the safety, profitability, and regulatory compliance of Celsius’ digital asset-based finance platform,” the regulator said.

The latest order means Mashinsky will never be able to trade US commodities, futures and derivatives. Earlier this year, the CFTC and the US Securities and Exchange Commission issued guidance saying they considered most major cryptocurrencies to be commodities.

Source: CFTC

The settlement also puts an end to the CFTC’s first case against a digital asset lending platform and marks the end of one of the last remaining regulatory actions pending against Mashinsky.

Mashinsky was sentenced to 12 years in prison in May 2025 after pleading guilty to securities and commodities fraud for misleading Celsius’ customers about the safety of the crypto lending platform, which collapsed during a major market drawdown in 2022.

The CFTC alleged that Celsius received about $20 billion in funds and made risky investments to meet the returns it promised. 

Related: Onchain, in court: What happened in crypto legal news this week

Mashinsky has already been banned from ever working in crypto or finance after settling a Federal Trade Commission complaint in April that permanently barred him from working with any product or service that can be used to “deposit, exchange, invest, or withdraw assets.”

Mashinsky is still facing charges filed by the SEC in July 2023, accusing him of making an unregistered securities offering, misrepresenting Celsius’ business and safety and manipulating the price of its Celsius (CEL) token.

The SEC told a federal court in late May that it has “engaged in substantive settlement discussions” with Mashinsky, but no agreement had been reached, with the court granting the regulators’ request for another 60 days to continue discussions.

Mashinsky filed on May 26 to vacate his 12-year criminal sentence, claiming his lawyers were ineffective, that evidence was tainted by authorities’ misconduct and that FTX co-founder and convicted fraudster Sam Bankman-Fried was to blame for the manipulation of the CEL token.

A court on Saturday ordered prosecutors to respond to Mashinsky’s request by mid-August.

Magazine: Big Questions: Do we really only need 2–5 cryptocurrencies?

A major bank projects XRP ETFs could draw $4 billion to $8 billion in their first year if the CLARITY Act passes, three to six times what they have managed so far. The number rests on a specific argument about who is buying XRP, who is not, and a wall of supply at $1.45.

Standard Chartered, one of the largest banks in the world, has projected that XRP exchange-traded funds could attract $4 billion to $8 billion in inflows in their first year if the CLARITY Act passes. That is three to six times the roughly $1.44 billion that XRP ETFs have pulled in since their launch in November 2025.

Solana has fallen more than 6% from its June 15 high after a rejection at a major resistance zone, combined with a hawkish Federal Reserve outlook, pushed traders into risk-off positioning.

According to data from crypto.news, Solana (SOL) dropped from a recent peak of $75.60 to an intraday low of $70.70 on June 18 before stabilizing near $71. The decline followed a sharp recovery from early June lows around $62, where SOL had rallied more than 20% alongside a broader rebound across the crypto market.

The selling accelerated after the Federal Reserve kept interest rates unchanged at 3.50%–3.75% while warning that inflation risks remain elevated. Policymakers also projected the possibility of additional tightening in 2026, prompting traders to reduce exposure to high-beta assets.

Bitcoin retreated toward $64,000 following the announcement, while several large-cap altcoins posted steeper losses.

Oil markets added another layer of uncertainty. Although reports of a preliminary U.S.-Iran agreement helped crude prices retreat from recent highs, traders continued to assess whether geopolitical tensions and inflation pressures could keep monetary policy restrictive for longer than previously expected.

Solana price faces resistance at former support as liquidation risks build

The daily chart shows SOL rejecting a major resistance area between $75 and $76, a zone that previously acted as structural support before June’s breakdown. After failing to reclaim that level, price slipped back below the 61.8% Fibonacci retracement near $74.80 and now trades just above the 78.6% retracement level around $68.40.

A descending trendline connecting the May and June highs remains intact, preserving the short-term bearish structure. A daily close above that trendline would expose resistance levels near $74.80 and $79.30, while a successful breakout could open the path toward the 50% retracement level near $79 and eventually the $84 area.

Momentum indicators remain mixed. The Relative Strength Index has recovered from oversold territory but remains below the neutral 50 mark, suggesting buyers have yet to regain full control. Meanwhile, the Aroon indicator continues to favor the bears, with the Aroon Down reading holding significantly above Aroon Up.

Commenting on the setup, market commentator BATMAN noted that SOL had been “rejected by its previous support level, now as resistance,” adding that the stochastic oscillator had reached the same overbought region that preceded the last major top. He argued that “there’s a big chance we’ll see further bearish continuation from here.”

Derivatives positioning presents another challenge. CoinGlass liquidation heatmap data shows a dense cluster of leveraged positions between $74 and $76, creating a significant liquidity pocket above current prices.

Additional liquidation interest sits near $66, while the largest concentration of liquidity remains around the $65 region. Such clusters often attract short-term price moves as market makers hunt leveraged positions.

A break below $70 could expose June lows

Beyond technical factors, Solana continues to face questions about network activity. DefiLlama data has shown weaker transaction fee generation and slower growth in total value locked compared with earlier stages of the cycle, reducing one of the key drivers behind SOL’s outperformance over the past year.

At the same time, institutional capital has increasingly gravitated toward traditional markets. Strong demand surrounding the SpaceX IPO and continued enthusiasm for artificial intelligence-linked equities have drawn liquidity away from speculative crypto assets. Digital asset investment products have also faced persistent outflows in recent weeks.

The immediate support level remains near $70. A decisive break below that threshold could bring the June low around $62 back into focus, with the Fibonacci extension projecting downside risk toward the $60 area.

On the upside, bulls must first reclaim the $74–$76 resistance band before a broader recovery thesis can regain credibility.

Canadian fintech Wealthsimple is launching a prediction markets app powered by Kalshi, giving that country’s retail investors access to thousands of event-based contracts following regulatory approval earlier this year.

The standalone app, called Wealthsimple Predict, is scheduled to launch this summer and will offer Canadian users access to about 4,000 event contracts listed on Kalshi across categories including financial markets, economic indicators and climate.

Source: Kalshi

The Canadian Investment Regulatory Organization (CIRO) in March authorized the firm to offer prediction market contracts tied to those categories. It is the second investment dealer authorized by CIRO to offer prediction market trading in Canada. The contracts will be regulated as derivatives and must have settlement periods of at least 30 days.

The Canadian rollout comes as Kalshi expands beyond prediction markets. On Thursday, the company said that its perpetual futures products were now live for trading, following a May 31 announcement that marked the company’s entry into the crypto perpetual futures market.

Source: Kalshi

Related: Kentucky sues Kalshi, Polymarket, joining prediction market legal battle

CME pushes back against CFTC’s crypto derivatives stance

Kalshi’s expansion beyond prediction markets is already facing pushback from established derivatives exchanges. 

On Thursday, CME Group sued the US Commodity Futures Trading Commission (CFTC) over its approval of cryptocurrency perpetual futures contracts offered by Kalshi and similar products by Coinbase, arguing the regulator misclassified the products under federal law. The filing followed comments from CME CEO Terrence Duffy a day earlier that the exchange planned to challenge the approvals in court.

CME CEO Terry Duffy. Source: CNBC Fast Money

The lawsuit comes amid a broader push to bring crypto perpetual futures onshore. In May, the CFTC approved Bitcoin perpetual futures contracts for Kalshi and issued a no-action position allowing Coinbase to offer similar products. 

Since then, Coinbase expanded US institutional access to global crypto derivatives markets, while Kraken launched perpetual futures trading this week through its CFTC-regulated Bitnomial exchange.

Related: BBB National Programs refers prediction market Kalshi to state regulators over ad inquiry

Countries push back against prediction markets

Despite gaining traction in Canada, prediction markets continue to face regulatory resistance in several jurisdictions. In May, Spanish regulators ordered internet providers to block access to Kalshi and Polymarket while investigating whether the platforms were operating in violation of national gambling regulations.

Asian regulators have also moved against prediction markets. Indonesia recently banned Polymarket after users traded contracts tied to whether President Prabowo Subianto would leave office early, while Japanese crypto exchange Bitbank warned users over Polymarket-linked transfers and South Korean police reportedly investigated local users over alleged gambling violations.

In the United States, at least 11 states have challenged prediction markets in recent months. At the center of the dispute is whether event contracts should be regulated under state gambling laws or as federally regulated derivatives overseen by the CFTC.

Speaking at Bitso’s Stablecoin Conference in Mexico City on June 16, Digital Chamber CEO Cody Carbone said the growing conflict between the CFTC and state gambling regulators is likely headed for the US Supreme Court.

Source: Cointelegraph

Magazine: The end of anon? AI could unmask crypto’s hidden identities

CME Group has filed a lawsuit against the U.S. Commodity Futures Trading Commission after the regulator approved crypto perpetual futures that have already generated more than $1 billion in trading volume.

According to Bloomberg, the derivatives exchange sued the CFTC and its chairman, Michael Selig, arguing that the agency improperly classified crypto perpetual contracts as futures instead of swaps.

The legal challenge comes days after several regulated perpetual products gained approval in the United States, opening a market that has long been dominated by offshore exchanges.

Earlier this week, outgoing CME Chief Executive Terrence Duffy told CNBC that the company planned to take legal action after the regulator cleared platforms including Kalshi and Coinbase to offer regulated crypto perpetual futures.

Duffy argued that perpetual contracts fall under the swap category established by the Dodd-Frank Act and should not be treated as standard futures products.

In its complaint, CME stated that the CFTC departed from its own historical approach toward similar instruments. The exchange argued that the regulator had previously viewed perpetual-style products as swaps and that the latest approvals bypassed procedures Congress established for that market segment.

The filing further alleges that the approval process did not go through formal rulemaking despite creating a new framework for perpetual contracts. According to the complaint, Chairman Selig effectively overrode statutory definitions established by Congress when authorizing the products.

CME challenges classification of crypto perpetual contracts

At the center of the dispute is Kalshi’s Bitcoin perpetual futures contract, which received CFTC approval on May 29. According to the regulator, the BTCPERP product can remain listed as long as it complies with the Commodity Exchange Act and existing CFTC regulations.

While approving the contract, the CFTC also stated that perpetual structures may not be appropriate for every asset class and indicated that products would continue to be reviewed individually.

As previously reported by crypto.news, Kalshi later expanded beyond Bitcoin-linked contracts, launching additional perpetual products tied to cryptocurrencies including Ethereum, XRP, and Hyperliquid. The exchange has since disclosed that its perpetual futures business generated more than $5.5 billion in trading volume within weeks of launch.

Separately, crypto.news reported that Coinbase secured a regulated route to offer certain crypto perpetual futures products in the U.S. through infrastructure connected to Deribit, the derivatives exchange it acquired.

CME’s complaint also references intellectual property and licensing concerns. Duffy told CNBC that CME holds exclusive agreements with benchmark providers and argued that related products should be routed through CME regardless of whether they use a perpetual structure.

Legal experts see uncertainty around CME’s claims

Responding to the lawsuit, a CFTC spokesperson told Bloomberg that CME had chosen litigation instead of competing directly in the market. The spokesperson characterized the challenge as opposition to the Trump administration’s pro-innovation regulatory approach and argued that established firms were resisting increased competition.

Legal analysis from StarkWare General Counsel Katherine Kirkpatrick suggested the outcome may not be straightforward. In a June 18 X post, she noted that the CFTC previously treated perpetual products as swaps during its enforcement case against Binance, although she added that enforcement positions do not create binding precedent.

Kirkpatrick also stated that federal law does not require the CFTC to spend 45 days reaching a decision or maintain a quorum before acting, meaning the chair may have authority to approve products independently.

Addressing CME’s competitive injury argument, she said the exchange would still need to demonstrate actual harm and noted that offshore perpetual trading venues already compete with CME regardless of the agency’s decision.

According to Kirkpatrick, perpetual contracts remain a relatively new product category in the U.S., making it unlikely that Congress specifically addressed them when passing Dodd-Frank.

“Perps are still new(ish), which means they weren’t intended to be addressed by Congress when Dodd-Frank was passed. The CFTC has discretion to categorize novel products, & its choice of future vs swap here is reasonable.”

Custodia Bank and Vantage Bank have outlined a new mechanism they say could help traditional lenders experiment with tokenized payments without giving up control of customer deposits. In a white paper shared with Cointelegraph, the firms describe a “switching” token that behaves like a bank deposit within a banking consortium, but converts into a cash-and-Treasury backed stablecoin when transferred to users outside that network.

The proposal is designed to work through what the companies call the Hazel network. According to the paper, the system has been running on Ethereum since March, with participating banks testing the infrastructure and preparing for a wider rollout later this year.

Key takeaways

• The Hazel network token is intended to function as a bank deposit on-network, then as a stablecoin when moved to external users.
• Custodia and Vantage say the platform can run alongside banks’ existing core systems rather than replacing them.
• The companies report the system has been operating on Ethereum since March and is being tested by consortium participants.
• They expect broader availability to banks and their customers in the fourth quarter of 2026.
• The initiative comes as banks explore blockchain payment tooling while resisting risks they associate with stablecoin competition.

A token that changes role across networks

The central idea in the Hazel proposal is a token that adjusts its backing depending on where it is held and how it is transferred. Per the white paper, when the token sits within the participating-banking consortium, it operates as a deposit issued by a bank in that network. When it leaves the Hazel environment and reaches external parties, it would instead act as a stablecoin backed by cash and short-term U.S. Treasuries.

Custodia and Vantage also frame the architecture as a practical bridge between conventional banking records and blockchain settlement. Rather than forcing banks to migrate their entire ledger systems, the firms say the platform can operate alongside current core banking and payment infrastructure.

That “dual-mode” design is meant to address an industry tension that has been growing alongside stablecoin adoption: banks want the benefits of blockchain-based payments, but they are wary of losing deposits to stablecoin issuers or of taking on regulatory and competitive risks they believe could follow from stablecoin-linked products.

How Hazel could fit into banks’ day-to-day operations

According to the companies, participating institutions would not need to replace existing core banking systems. Instead, the Hazel network would integrate with current ledgers and payment channels, enabling banks and credit unions of different sizes—including community banks—to participate in tokenized payments.

The firms say their goal is to allow institutions to use tokenized transfers while keeping customer deposits inside the banking system. If implemented as described, that would reduce one of the biggest barriers to bank involvement in stablecoin-adjacent workflows: the concern that customer funds move away from traditional balance sheets when token settlement becomes the default.

The white paper also states that the platform’s testing is already underway. Custodia and Vantage said the system has been running on Ethereum since March, and participating banks are now testing the solution ahead of a broader rollout planned for later this year.

Stablecoins, deposits, and the search for alternatives

The Hazel proposal lands in a moment when mainstream banking is actively seeking alternatives to stablecoin rails without abandoning blockchain tooling. Earlier this month, The Wall Street Journal reported that The Clearing House—a payments and clearing industry organization whose owners include major U.S. banks such as JPMorgan Chase, Bank of America, and Citigroup—plans to launch a tokenized deposit network in the first half of 2027. That system, as reported by the publication, is intended to let banks settle payments using blockchain-based representations of customer deposits.

These developments highlight a common pattern: banks are pursuing tokenization, but increasingly want it to keep deposits within their control rather than tying settlement to stablecoins issued by non-bank entities.

Regulatory and legislative friction also remains a key backdrop. JPMorgan CEO Jamie Dimon has previously argued that banks should continue opposing provisions in the CLARITY Act—a U.S. crypto market structure bill—on the grounds that such rules could allow crypto firms to compete for deposits without obtaining bank charters. The bill advanced out of the Senate Banking Committee in May and still requires approval from both chambers of Congress, according to earlier reporting summarized in the source text.

At the same time, stablecoins continue to scale. DefiLlama data cited in the source indicates the total stablecoin market capitalization is roughly $315 billion, up from about $251 billion a year earlier. That growth underscores why banks face mounting competitive pressure—and why they may see tokenized deposit approaches like Hazel as a way to participate in blockchain settlement while defending deposit-based revenue streams.

Timeline expectations and what to watch next

Custodia and Vantage say they expect the Hazel network to become broadly available to banks and their customers in the fourth quarter of 2026. They also indicate that participating banks are testing the system now, with a broader rollout planned later this year.

For investors and builders, the most important open questions are practical: whether Hazel can deliver seamless settlement across consortium and external counterparties, and how the “deposit-to-stablecoin” switching model operates under real-world compliance and risk controls. The companies’ emphasis on running alongside existing banking systems suggests they view integration risk as manageable—but outcomes will depend on how quickly banks can operationalize the testing results.

Market participants should also watch whether Hazel’s concept gains traction alongside other bank-led tokenized deposit initiatives. If tokenized deposits become a mainstream alternative to external stablecoin usage, the competitive landscape for settlement could shift—potentially changing how institutions weigh stablecoin exposure versus on-balance-sheet or consortium-backed models.

As Hazel moves from Ethereum-based testing toward broader deployment, the key signals to follow are whether participating banks expand beyond early pilots, how the switching mechanism performs in live transfers, and whether regulators and lawmakers clarify how these tokenized deposits should be treated across on-network and off-network use cases.