U.S. regional banks establishing a tokenized deposit system on ZKsync to compete with stablecoins.

The Cari Network is aiming for a 2026 launch as banks evaluate the issuance, transfer, and redemption of digital deposits. Among the participating banks are Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp.

M&T Bank in Buffalo, NY (Wikipedia)

Key points:

• A consortium of regional banks is creating the Cari Network to facilitate the instant transfer of tokenized deposits on blockchain technology while keeping funds within the regulated banking framework.
• Utilizing ZKsync’s infrastructure, the initiative is set for a 2026 launch as banks examine the issuance, transfer, and redemption processes for digital deposits.
• Participating banks encompass Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp.

A consortium of U.S. regional banks is working on the Cari Network, a platform for tokenized deposits developed on ZKsync, a layer-2 network, as financial institutions seek a regulated method to innovate digital payments.

The network, introduced on Tuesday, is being designed in collaboration with banks such as Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. Its aim is to enable banks to transform customer deposits into digital tokens that can be transferred instantaneously among institutions — without those funds ever exiting the banking system.

This represents a significant difference from stablecoins, which are frequently issued by nonbank entities. Cari asserts that its tokens will continue to symbolize standard bank deposits, ensuring they remain on banks’ balance sheets and are subject to existing regulations and FDIC insurance.

Internally, the system will operate on “Prividium,” a private, permissioned blockchain developed by Matter Labs, the primary developer responsible for the ZKsync network. Only authorized users — such as banks — will have access, and transactions are designed to be both rapid and confidential while permitting regulators to audit activities when necessary.

This initiative indicates a rising movement among banks to compete with crypto-based payment systems by providing similar speed and around-the-clock settlement, yet within established regulatory frameworks.

The Mid-Size Bank Coalition of America has endorsed the initiative, as noted in a blog post, underscoring the interest of regional lenders in enhancing their payment infrastructure without risking the migration of deposits to newer digital options.

The Cari network is slated for a broader rollout in 2026, and the involved banks will evaluate how these tokenized deposits are created, exchanged between parties, and converted back into standard U.S. dollars.

“Banks should take the lead in the next phase of digital currency, rather than merely responding to it,” stated Cari CEO Gene Ludwig.

Matter Labs CEO Alex Gluchowski remarked that the initiative demonstrates how banks can leverage blockchain technology while adhering to privacy and compliance standards.

“The financial infrastructure is experiencing a transformation similar to the shift computing underwent decades ago, transitioning from isolated databases to shared, programmable infrastructure,” Gluchowski stated in the blog entry. “With Prividium, banks are able to issue and transfer deposits on blockchain infrastructure while maintaining the privacy, compliance, and control required by regulated entities.”

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