The project brings together a consortium of mid-sized lenders, including Huntington Bancshares, KeyCorp, First Horizon, M&T Bank, and Old National Bancorp, which have been testing the system since early 2026.
U.S. regional banks are moving to modernize the payments infrastructure by developing a blockchain-based network for tokenized deposits, aiming to compete directly with the growing dominance of stablecoins in digital finance.
The initiative, led by fintech venture Cari Network, will run on ZKsync infrastructure, a scaling solution built atop Ethereum, and is designed to enable banks to issue and transfer digital representations of customer deposits with near-instant settlement.
The project brings together a consortium of mid-sized lenders, including Huntington Bancshares, KeyCorp, First Horizon, M&T Bank, and Old National Bancorp, which have been testing the system since early 2026.
Unlike stablecoins, which are typically issued by crypto-native firms, tokenized deposits represent liabilities held directly on bank balance sheets and remain within regulated financial institutions. This structure allows them to retain features such as deposit insurance and compliance safeguards while offering the speed and programmability associated with blockchain-based payments.
The network is being built using ZKsync’s “Prividium” stack, a permissioned blockchain environment tailored for institutions requiring privacy, regulatory compliance, and data control. The platform enables continuous, 24/7 transfers between verified parties while keeping sensitive customer data within each bank’s internal systems.
Backers of the initiative say the effort reflects growing urgency among traditional banks to defend their role in payments and deposit-taking as stablecoins gain traction globally. By offering similar speed and efficiency, banks hope to prevent deposits from migrating to fintech and crypto platforms.
“Financial infrastructure is being redesigned in real time,” ZKsync leadership said, framing the project as a way for regional banks to remain competitive rather than risk being displaced.
The broader industry trend underscores a shift toward the tokenization of traditional financial assets. Tokenized deposits are increasingly viewed as a bridge between conventional banking and blockchain technology, enabling real-time settlement and improved liquidity while maintaining regulatory oversight.
A pilot rollout of the network is expected later this year, with a wider launch anticipated after initial testing phases.
Analysts caution, however, that scaling such systems will require interoperability, regulatory clarity, and widespread adoption across the banking sector. Still, the move signals intensifying competition between banks and stablecoin issuers over the future of digital payments infrastructure.
