ZKsync Powers Tokenized Deposits in Major U.S. Bank Network

Key Takeaways:

• Five U.S. regional banks are building a tokenized deposit network on ZKsync.
• Deposits remain FDIC-insured bank liabilities, not stablecoins.
• The system enables 24/7 programmable, real-time settlement within regulation.

A major shift is underway in how banks move money. A new network, with the support of regional lenders in the United States, promises to deliver traditional deposits in a blockchain manner without breaching existing regulations.The development shows that banks are now not just passive observers of the cryptocurrency space, but are actively moving into the blockchain space.

Banks Build Tokenized Deposit Network on ZKsync

ZKsync is powering a new system called the Cari Network, developed with five U.S. regional banks including Huntington Bank, First Horizon Bank, M&T Bank, KeyBank, and Old National Bank. The goal is clear: move traditional bank deposits onto blockchain rails while keeping them fully compliant.

While stablecoins are liabilities of the issuers, the new tokenized deposits are liabilities of the banks that issue them, holding them on the balance sheet and qualifying for FDIC insurance. It’s a large figure, with the banks involved holding a total of $8.3 trillion in assets.

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Not Stablecoins: A Different Model for Digital Money

Tokenized deposits differ from stablecoins in one key way: control stays with banks.

How the System Works

Users’ deposits are converted into digital tokens that represent actual bank-held funds. These tokens have the power to move in real-time between verified parties and then be redeemed back into USD at any time.

This system allows for:

• Real-time settlement
• Always-on (24/7) transactions
• Programmable payment flows

At the same time, identity and sensitive information are kept behind each bank’s internal systems.

Prividium Enables Private, Compliant Infrastructure

The system operates on a blockchain network called Prividium, which is created by Matter Labs. Prividium is a permissioned blockchain that is specifically designed for financial institutions.

Prividium is a combination of:

• Private transaction environments
• Regulatory auditability
• Security anchored to Ethereum

This means banks can operate blockchain systems without exposing sensitive data publicly, while still benefiting from Ethereum’s settlement security.

Banks Move to Stay Competitive Onchain

The push is part of the development of financial infrastructure that will eventually include programmable systems. Banks that are part of the Cari Network are seeking to modernize the system without ceding control of deposits. This is because the deposits will remain part of the traditional system and thus avoid the problem of disintermediation that is common with other crypto-based systems.

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The network has been designed to integrate with the existing banking system and its associated risks. This has been welcomed by industry bodies such as the Mid-Size Bank Coalition of America. They have endorsed the system as a way of safeguarding the traditional banking business model and its associated capabilities.

The Cari Network is now preparing for its wider rollout. Banks that are part of the network are expected to test the full lifecycle of deposits before they are rolled out.

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