U.S. regional banks building tokenized deposit network on ZKsync to rival stablecoins

A group of U.S. regional banks is developing the Cari Network, a tokenized deposit platform built on ZKsync, a layer-2 network, as lenders seek a regulated path to modernize digital payments.

The network, announced Tuesday, is being developed with banks including Huntington Bancshares, First Horizon, M&T Bank, KeyCorp and Old National Bancorp. It’s designed to let banks turn customer deposits into digital tokens that can move instantly between institutions — without those funds ever leaving the banking system.

That’s a key distinction from stablecoins, which are often issued by nonbank companies. Cari says its tokens will still represent regular bank deposits, meaning they stay on banks’ balance sheets and remain subject to existing regulations and FDIC insurance.

Under the hood, the system will run on “Prividium”, which is a private, permissioned blockchain built by Matter Labs, the main developer firm building the ZKsync network. Only approved participants — like banks — can use it, and transactions are designed to be both fast and private while still allowing regulators to audit activity when needed.

The effort reflects a growing push by banks to compete with crypto-native payment systems by offering similar speed and round-the-clock settlement, but within familiar regulatory guardrails.

The Mid-Size Bank Coalition of America has backed the project, according to a blog post, highlighting regional lenders’ interest in upgrading payments infrastructure without risking a loss of deposits to newer digital alternatives.

The Cari network will roll out more broadly in 2026, and the banks involved will test how these tokenized deposits are created, transferred between parties and converted back into regular U.S. dollars.

“Banks should be leading the next phase of digital money, not reacting to it,” said Cari CEO Gene Ludwig.

Matter Labs CEO Alex Gluchowski added that the project shows how banks can use blockchain technology while still meeting privacy and compliance requirements.

“Financial infrastructure is undergoing the same shift computing went through decades ago, from siloed databases to shared, programmable infrastructure,” Gluchowski said in the blog post. “With Prividium, banks can issue and move deposits on blockchain infrastructure while preserving the privacy, compliance, and control required by regulated institutions.”

Read more: Deutsche Bank’s L2 Blockchain to Be ‘Public and Permissioned,’ Says Tech Partner