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Five US regional banks have teamed up with blockchain infrastructure firm Cari and Ethereum scaling platform zkSync to develop tokenized bank deposits, in a move aimed at competing with stablecoins and modernizing cross-bank payments while keeping funds within the regulated banking system.
The consortium, including Huntington Bancshares, First Horizon, M&T Bank, KeyCorp and Old National Bancorp, is working to build a shared payments infrastructure known as the Cari Network. This would enable customers to transfer tokenized deposits instantly between participating institutions.
Today marks a new chapter for U.S. banking.
The Cari Network, developed alongside five regional banks, is building a new platform to bring tokenized deposits onchain.
Secure. Private. Within the regulatory perimeter. Powered by ZKsync’s Prividium. pic.twitter.com/TZYafawLV9
— ZKsync (@zksync) March 17, 2026
The initiative comes as banks face increasing competition from stablecoins and fintech payment providers offering round-the-clock transfers and faster settlement than traditional banking rails.
Stablecoins such as USDC and USDT have grown rapidly in recent years, offering users digital dollars that can move instantly across blockchain networks. However, regulators have increasingly highlighted that stablecoins are not covered by federal deposit insurance, creating a key distinction from traditional bank deposits.
For instance, the Federal Deposit Insurance Corporation (FDIC) recently signaled that payment stablecoins would not qualify for deposit insurance or pass-through protection, even when backed by funds held at insured banks, reinforcing concerns around consumer protection and financial stability.
Against this backdrop, participating banks aim to offer a regulated alternative by issuing tokenized deposits that remain liabilities of insured financial institutions, ensuring customer funds remain within the banking system.
Regional banks, in particular, have faced increased pressure to modernize payment systems following the rapid growth of digital assets and fintech platforms offering near-instant transfers, prompting efforts to develop FDIC-insured tokenized deposit alternatives to compete directly with stablecoins.
The Cari Network will run on Prividium, a permissioned blockchain infrastructure built using zkSync’s layer-2 technology on Ethereum, designed to improve transaction speed while maintaining regulatory compliance.
The Cari Network runs on ZKsync's Prividium, an L2 designed for financial institutions.
It enables banks to operate private, compliant blockchain infrastructure while anchoring settlement security to Ethereum.
This is how regulated finance enters the digital asset era. pic.twitter.com/QUbxjQON5m
— ZKsync (@zksync) March 17, 2026
Prividium will allow only approved financial institutions to participate, enabling banks to move tokenized deposits securely while maintaining oversight and auditability.
Using zkSync’s zero-knowledge technology, the network aims to support real-time settlement, 24/7 transfers and programmable payments, positioning banks to offer blockchain-based payments while keeping funds within the regulated banking system.
Under the proposed system, banks would issue digital tokens representing customer deposits. These tokens could be transferred instantly across the Cari Network, with settlement occurring in real time.
When a customer sends funds, the tokenized deposit would move between banks, and the receiving institution would credit the recipient’s account accordingly.
Notably, tokenized deposits could reduce friction in payments, eliminate settlement delays and enable new financial services built around programmable money.
Unlike stablecoins, which typically rely on reserves held by private issuers, tokenized deposits would remain within the traditional banking system and could qualify for deposit insurance, depending on regulatory structures.
The initiative comes as financial institutions globally explore tokenization of deposits, assets, and payment systems. JPMorgan has launched its Onyx by JPMorgan blockchain network for tokenized deposits and settlement, while HSBC introduced tokenized gold and digital asset custody services. Citi and BNY Mellon have also expanded tokenization and digital asset custody infrastructure.
Central banks are also developing digital currencies, with projects like the Digital Euro, Digital Yuan (e-CNY), and Project mBridge accelerating interest in blockchain-based financial infrastructure.
Over 50 banks from around the world have now signed up to the Swift payments scheme, a new framework designed to deliver faster, more predictable and fully transparent cross-border retail payments.
Banks across Australia, Bangladesh, Canada, China, Germany, India, Pakistan,… pic.twitter.com/l46Oj4O6Nb
— Swift (@swiftcommunity) March 5, 2026
Swift’s Chief Innovation Officer, Tom Zschach, noted that tokenized deposits could transform bank liquidity economics by unlocking trillions of dollars currently trapped in pre-funded accounts used for cross-border payments. By enabling instant, on-demand settlement, banks would no longer need to hold idle liquidity across multiple currencies, freeing capital for lending and investment.
The executive also added that tokenized deposits do not change regulatory frameworks, but instead improve efficiency, transparency and control, while Swift’s ledger infrastructure could help coordinate tokenized deposits, stablecoins and future digital currencies across networks.
Despite growing interest, tokenized deposits face regulatory and operational hurdles, as policymakers assess risks to financial stability and bank funding. The International Monetary Fund (IMF) has warned that the rapid growth of stablecoins could draw deposits away from traditional banks, potentially weakening lending capacity and monetary policy transmission if adoption accelerates.
Critics frame stablecoins as a threat to national security, but the real threat is to the banking profit model.
Treasuries yield roughly 3.89% while a standard savings account pays 0.39%. Banks capture that entire spread on deposits that could otherwise be earning closer to the… pic.twitter.com/kkNoU5GBWa
— Delphi Digital (@Delphi_Digital) March 18, 2026
Central banks have echoed similar concerns. The European Central Bank recently warned that stablecoins could siphon retail deposits from banks and pose broader financial stability risks if widely adopted, particularly during market stress.
In the United Kingdom, regulators have taken a cautious approach. The Bank of England proposed holding limits of around £20,000 for individuals and £10 million for businesses on systemic stablecoins to prevent large-scale deposit outflows from banks, while also requiring significant reserve backing.
Officials have also suggested that tokenized bank deposits may offer a safer alternative to stablecoins, as they remain within the regulated banking system and preserve financial stability safeguards.
The participating banks have not announced a firm timeline for launch, with pilot programs expected before broader deployment as regulators continue evaluating risks and adoption frameworks.
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