A consortium of U.S. regional banks has initiated the development of the Cari Network, a tokenized deposit platform leveraging ZKsync, a layer-2 blockchain technology. This initiative aims to modernize digital payments while adhering to regulatory frameworks.
The announcement, made on Tuesday, includes participation from banks such as Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. The Cari Network will enable these banks to convert customer deposits into digital tokens, facilitating instantaneous transfers between institutions without removing funds from the banking system.
This approach differentiates itself from stablecoins, which are typically issued by non-bank entities. The tokens created through the Cari Network will still represent traditional bank deposits, ensuring they remain on banks’ balance sheets and are covered by existing regulations and FDIC insurance.
The underlying technology, referred to as “Prividium,” is a private, permissioned blockchain developed by Matter Labs, the primary firm behind the ZKsync network. Access to this system will be restricted to approved participants, such as banks, allowing for rapid and private transactions while maintaining the ability for regulators to audit activities when necessary.
This initiative reflects a broader trend among banks striving to enhance their payment systems to compete with cryptocurrency-based platforms, offering similar speed and continuous settlement within established regulatory boundaries.
The Mid-Size Bank Coalition of America has expressed support for the project, indicating a strong interest among regional banks to upgrade their payment infrastructure without losing deposits to emerging digital alternatives.
The Cari Network is set for a wider rollout in 2026, with participating banks expected to test the processes for creating, transferring, and converting these tokenized deposits back into U.S. dollars.
“Banks should be leading the next phase of digital money, not reacting to it,” stated Gene Ludwig, CEO of Cari.
Alex Gluchowski, CEO of Matter Labs, emphasized that this project illustrates how banks can effectively utilize blockchain technology while adhering to privacy and compliance standards. He remarked, “Financial infrastructure is undergoing the same shift computing went through decades ago, from siloed databases to shared, programmable infrastructure. With Prividium, banks can issue and move deposits on blockchain infrastructure while preserving the privacy, compliance, and control required by regulated institutions.”
The Cari Network, developed by a coalition of regional U.S. banks, aims to create a tokenized deposit system on ZKsync, allowing instant transfers while maintaining regulatory compliance. Set for broader implementation in 2026, this initiative seeks to modernize banking infrastructure and compete with stablecoins.