A consortium of U.S. regional banks is collaborating on the development of the Cari Network, a tokenized deposit platform powered by ZKsync, a layer-2 network, as financial institutions seek a compliant way to modernize digital payments.
The announcement of the network, made on Tuesday, includes participation from banks such as Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. The platform aims to enable banks to convert customer deposits into digital tokens that can be transferred instantly between institutions, all while keeping the funds within the banking system.
Unlike stablecoins typically issued by nonbank entities, Cari’s tokens will continue to represent traditional bank deposits, ensuring they remain on the banks’ balance sheets and adhere to existing regulations and FDIC insurance requirements.
Running on “Prividium,” a private, permissioned blockchain developed by Matter Labs, the system is accessible only to approved participants like banks. Transactions are designed to be fast and private, yet regulators can still conduct audits when necessary.
This initiative reflects banks’ increasing efforts to compete with cryptocurrency-based payment systems by offering similar speed and constant settlement, all while operating within familiar regulatory frameworks.
The Mid-Size Bank Coalition of America has expressed support for the project, signaling regional banks’ interest in enhancing payment infrastructure without risking the migration of deposits to newer digital alternatives.
The Cari network is scheduled for a wider launch in 2026, with participating banks testing the creation, transfer, and conversion of tokenized deposits back into U.S. dollars.
“Banks should be leading the next phase of digital money, not reacting to it,” remarked Cari CEO Gene Ludwig.
Matter Labs CEO Alex Gluchowski emphasized how banks can leverage blockchain technology without compromising privacy and compliance standards.
Read more: Deutsche Bank’s L2 Blockchain to Be ‘Public and Permissioned,’ Says Tech Partner