Buyer's Guide for Banks and Financial Institutions
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A buyer's guide for banks evaluating digital asset infrastructure: self-custody with MPC or HSM, stablecoins, tokenized deposits and core banking integration.
A Digital Asset Infrastructure Evaluation Guide for Banks
Self-Custody, Stablecoins and Tokenized Deposits
Choosing digital asset infrastructure means deciding how your bank will control client funds in day-to-day operations. Who can initiate a transfer, and who must approve it? How are signing keys protected? How will transactions reconcile with your core banking system?
Many banks will rely on external providers to build these capabilities. In EY-Parthenon’s June 2025 survey, 79% of financial institutions planned to use third parties to build their stablecoin infrastructure. That makes provider selection a decision with lasting consequences for how a bank operates, integrates new services and retains control over its assets.
This guide is for heads of digital assets, CTOs, CISOs, treasury and payments leaders, and risk and compliance officers at commercial banks, private banks, digital banks, credit unions and other regulated institutions. It describes custody models (MPC and HSM), governance, core banking integration, compliance and resilience, and how Utila supports custody, stablecoin payments and tokenized deposits.
Control Requirements for Bank Digital Asset Programs
Bank programs usually start narrow, with a treasury-only pilot or a single stablecoin corridor, and expand to client custody, payments and tokenized deposits once the control model has passed internal review. The infrastructure chosen for the pilot therefore has to satisfy the full review from day one, because third-party risk, information security and audit will not re-approve a different architecture later. Three requirements dominate:
Key Custody and Signing Authority. Security teams want to know where keys live, whether keys stay in bank-controlled HSMs or are split with MPC, and whether the vendor can ever move funds on its own. Utila’s comparison of multisig and MPC and its HSM custody model set out the options.
Integration with the Core and Existing Controls. Transaction data has to flow back to core banking systems, often through middleware, and audit logs into the bank’s SIEM. Approval rules must mirror the bank’s existing maker-checker matrix.
Regulatory and Operational Resilience. Travel rule, sanctions screening and record retention rules apply from the first transaction, and frameworks such as the EU’s DORA require tested exit and continuity plans for critical ICT providers.
The next section shows how Utila’s architecture answers each requirement.
Utila for Banks
Utila provides digital asset infrastructure for banks covering custody, stablecoin payments, tokenized deposits and real-world assets on one governed platform. We are SOC 2 Type II compliant, ISO 27001 certified and independently audited by Halborn. Learn more about our security architecture and controls.
Platform Capabilities
MPC and HSM Deployment Models. Our MPC architecture splits private keys into shares. Utila cannot sign transactions independently and does not take custody of funds. For banks that require it, the HSM model keeps keys non-extractable inside the bank’s own HSMs, runs the Utila cosigner on-premises and never passes key material to Utila. For example, our partnership with Bermuda combines bank-controlled Thales Luna HSMs with onchain privacy for confidential custody and settlement.
Maker-Checker Governance. Transactions are initiated in the web console or API and signed on a separate approved device, with quorum approvals, role-based access, address whitelisting and a full audit trail. Policy changes themselves require admin quorum.
Embedded Compliance. We integrate KYT screening through Chainalysis, Elliptic and TRM Labs, and Travel Rule messaging through Notabene directly into the transaction workflow. Our stablecoin compliance guide for banks explains the applicable requirements, including FinCEN’s $3,000 Travel Rule threshold.
Core Banking Connectivity. REST APIs, webhooks and exportable statements feed the bank’s ledger, and Utila’s partnership with Matera connects digital assets to core banking operations.
Business Continuity and Exit Planning. Our Business Continuity feature mirrors wallets, policies and whitelists from another provider, and multi-cloud deployment removes a single cloud dependency, both of which support DORA-style exit plans.
Bank Use Cases
Treasury and Intrabank Stablecoin Operations. 24/7 movement of stablecoins between bank entities and accounts, usually the first pilot. See stablecoin use cases in banking.
Client Custody. Create separate vaults for each client or entity, with dedicated access controls and approval policies. Manage them through our Treasury Management tools or integrate wallet operations into your own services using our Wallet-as-a-Service APIs.
Cross-Border Stablecoin Payments. Corridor payments and settlement through Stablecoin Payments, with counterparties discoverable on Utila Link.
Tokenized Deposits and Bank Stablecoins. Issuance and lifecycle governance for ERC-20 and ERC-3643 tokens, as with the N3XT Digital Dollar.
Tokenized Securities and RWAs. Tokenization for fund units and other assets; Utila is part of the DTCC tokenization working group and partners with Ownera on tokenized asset distribution.
The decision framework that follows turns these capabilities into the questions a bank’s review committee will ask.
Decision Framework for Bank Digital Asset Infrastructure
Use this framework to compare providers against your bank’s requirements. Each category identifies what to evaluate, why it matters and the evidence to request during due diligence.
Category | What to Evaluate | Why It Matters for Banks | Evidence to Request |
|---|---|---|---|
Custody model | MPC, HSM or hybrid; where key material lives; customer-held backups | Security teams approve architectures they can map to existing key-management policy | Architecture diagram, key ceremony and backup procedures |
Vendor control | Whether the vendor can move funds or alter policies unilaterally | Removes the vendor as a single point of compromise | Cryptographic design review, independent MPC library audit, MPC protocol write-up |
Segregation of duties | Maker-checker, role-based access, separate initiation and signing devices | Mirrors the bank’s existing approval matrix | Role matrix, policy demo with tiered approvals |
Policy change control | Admin quorum on policy edits; logging of every change | Prevents a single administrator from loosening controls | Sample policy-change audit log |
Core banking integration | APIs, webhooks, statement exports, middleware or core partners | Every on-chain movement must post to the general ledger | Integration guide, sample ledger export |
Compliance controls | KYT vendors, travel rule, screening before transfer, record retention | Applies from the first transaction, not at scale | Integration list, sample screening and travel rule records |
Operational resilience | Business continuity, provider exit, multi-cloud, recovery without the vendor | Required under DORA and most supervisory outsourcing rules | Continuity test results, exit plan template |
Security assurance | SOC 2 Type II, ISO 27001, independent audits, penetration testing | Third-party risk files need current reports | SOC 2 Type II report, audit and pen-test summaries |
Multi-use coverage | Custody, payments, tokenized deposits and RWAs on one platform | A pilot platform that cannot extend forces a second procurement | Product roadmap, reference architecture per use case |
With criteria defined, the comparison below shows how the main sourcing routes perform against them.
How Utila Compares for Banks
Banks typically compare a governed technology platform such as Utila with sub-custody at a qualified custodian, on-premises HSM custody software, and building in-house. Archetype columns describe common patterns, not named vendors.
Capability | Utila | Sub-Custody at a Qualified Custodian | On-Prem HSM Custody Software | In-House Build |
|---|---|---|---|---|
Who controls keys | The bank, via MPC shares or bank-held HSMs | The custodian | The bank | The bank |
Deployment | Cloud SaaS with self-hosted cosigner, or on-prem with keys in bank HSMs | Custodian-operated | On-premises | On-premises or private cloud |
Governance | Policy engine with quorums, RBAC, whitelists, admin quorum | Custodian’s controls plus bank instructions | Varies by product | Built and maintained by the bank |
Use-case breadth | Custody, payments, tokenized deposits, RWAs | Mostly custody | Mostly custody | Whatever is built |
Chain coverage | 100+ blockchains with BYO EVM | Custodian’s supported list | Often narrower, slower to add | One chain at a time |
Regulatory role | Technology provider; pair with licensed partners where a qualified custodian is required | Licensed custodian | Technology provider | Bank’s own license |
Ecosystem access | Utila Link counterparties, 30+ integration partners | Custodian network | Limited | Bilateral |
Time to pilot | Weeks | Weeks to months | Months, hardware-dependent | Quarters to years |
Note: Utila is a technology provider, not a licensed custodian, so banks whose supervisor requires a qualified custodian for client assets pair Utila with a licensed partner or use their own charter. The next section shows the institutions and partners already working with Utila.
Banks, Central Bank Programs and Partners on Utila
Utila’s bank-facing work spans a chartered bank’s tokenized deposit, a central bank settlement pilot and core banking integration. Each shows a different part of the control model in production or pilot conditions.
N3XT Digital Dollar. N3XT, a Wyoming-chartered narrow bank, launched NDD in December 2025 as a bank-issued tokenized deposit backed one-to-one by cash or ultra-short-term US Treasuries and settling 24/7/365. Utila is a launch partner, giving institutions the infrastructure to send, receive, convert, store and control NDD.
Project Acacia. In the Reserve Bank of Australia’s tokenized asset settlement program, Utila was selected as wallet infrastructure provider for Australian Payments Plus, securing pilot assets with MPC wallets and enforcing compliance controls through its policy engine.
Matera. Matera’s Digital Twin tracks customer digital asset balances, treasury positions and ledger entries alongside the bank’s existing core, while Utila handles wallets, keys, policies and on-chain execution. Banks can offer stablecoin deposits, withdrawals, transfers and conversion without replacing their core.
Bermuda. For central banks, Utila pairs on-premises HSM custody, with keys generated and stored in the bank’s own HSMs such as Thales Luna, with Bermuda’s privacy layer for confidential settlement. Utila never holds key material in this model. Related: blockchain privacy for banks.
XEROF. A regulated Swiss VASP providing IBAN accounts and cross-border settlement, XEROF mirrored its existing environment onto Utila and connected its internal systems in under a week.
These programs share a staged rollout, which the pilot path below follows.
From Pilot to Production
Bank timelines are set by vendor-risk and legal review more than by engineering, so the fastest programs start the review in parallel with a narrow technical pilot.
Start Vendor Review Early. Share the SOC 2 Type II report, ISO 27001 certificate, audit summaries, architecture and continuity documentation with third-party risk and information security in the first weeks.
Choose the Custody Model. Decide between MPC, bank-held HSMs or a hybrid, and where the cosigner runs.
Map the Approval Matrix. Translate existing maker-checker rules into roles, quorums, limits and whitelists, including admin quorum on policy changes.
Run a Treasury Pilot. Move stablecoins between bank-controlled vaults through the console, with screening, travel rule and ledger export switched on.
Integrate and Extend. Connect the core through APIs, webhooks or a partner such as Matera, then add client custody, payments or tokenized deposits.
Frequently Asked Questions
Can Utila Move a Bank’s Funds on Its Own?
No. In the MPC model each key is split into shares held by the bank and Utila, and a transaction needs the bank’s share and the bank’s policy approvals. In the HSM model keys stay inside the bank’s HSMs and Utila never receives key material.
Does Utila Support HSM and On-Premises Deployment?
Yes. Utila supports an HSM model in which keys are generated and stored in the bank’s own HSMs, such as Thales Luna, with the Utila cosigner and policy checks running on-premises. Banks that prefer cloud deployment use the MPC model with a self-hosted cosigner.
How Does Utila Integrate with Core Banking Systems?
Through REST APIs, webhooks and statement exports that post on-chain activity to the bank’s ledger, either directly or through middleware. Utila’s partnership with Matera adds a ledger layer that runs alongside an existing core without replacing it.
Is Utila a Licensed Custodian?
No. Utila is a technology provider. Banks use their own charter and licenses, or pair Utila with a licensed partner where a supervisor requires a qualified custodian for client assets.
What Security Certifications Does Utila Hold?
Utila is SOC 2 Type II compliant and its platform has been audited by Halborn, while its MPC library has been independently audited by Cure53. Its MPC protocol design is documented publicly, and further reports are available for vendor risk reviews under NDA.
Can a Bank Start with a Treasury-Only Pilot?
Yes. Many banks begin with stablecoin movements between their own vaults through the web console and mobile approvals, then add API automation, client custody and tokenized deposits once internal review is complete.
Plan Your Bank Pilot
A working session with Utila’s team maps your approval matrix, custody model and core banking integration onto a pilot architecture and gives your vendor-risk team the documentation it will ask for.
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