A group of U.S. regional banks is developing the Cari Network, a tokenized custodial platform built on ZKsync, a layer 2 network, as lenders seek a regulated path to modernizing 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 is designed to allow banks to transform customer deposits into digital tokens that can be transferred instantly between institutions – without those funds leaving the banking system.
This is a key distinction from stablecoins, which are often issued by non-bank companies. Cari says its tokens will still represent regular bank deposits, meaning they will remain on banks’ balance sheets and remain subject to current regulations and FDIC insurance.
Under the hood, the system will run on “Prividium,” which is a private, permissioned blockchain built by Matter Labs, the leading development company building the ZKsync network. Only approved participants – like banks – can use it, and transactions are designed to be both fast and private while allowing regulators to verify activity when needed.
The effort reflects a growing desire by banks to compete with crypto-native payment systems by offering similar speed and around-the-clock settlement, but within familiar regulatory guardrails.
The Mid-Size Bank Coalition of America supported the project, according to a blog post, highlighting regional lenders’ interest in improving infrastructure payments without risking losing deposits to new digital alternatives.
The Cari network will be rolled out more widely in 2026 and the banks involved will test how these tokenized deposits are created, transferred between parties and converted back to regular US dollars.
“Banks should be leading the next phase of digital money, not reacting to it,” said Gene Ludwig, CEO of Cari.
Alex Gluchowski, CEO of Matter Labs, added that the project shows how banks can use blockchain technology while meeting privacy and compliance requirements.
“Financial infrastructure is undergoing the same IT shift as decades ago, moving from siled databases to shared, programmable infrastructure,” Gluchowski said in the blog post. “With Prividium, banks can issue and move deposits on blockchain infrastructure while maintaining the privacy, compliance and control required by regulated institutions.”
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