Key takeaways
- BitGo and ZKsync are building infrastructure that lets banks issue, transfer, and settle tokenized deposits on a permissioned blockchain called Prividium.
- Five U.S. regional banks, including Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp, are already testing a related tokenized deposit network called Cari.
- Unlike stablecoins, tokenized deposits remain FDIC-insured bank liabilities on the issuing bank’s balance sheet.
- Citi projects tokenized bank deposits could support $100 to $140 trillion in annual flows by 2030.
BitGo, the institutional crypto custodian, and ZKsync, the Ethereum layer 2 network built by Matter Labs, announced on March 25 that they are jointly building infrastructure to let banks issue and settle tokenized deposits on-chain. The partnership is the latest signal that traditional banking and blockchain rails are converging faster than most expected.
A tokenized deposit is a digital representation of a traditional bank deposit recorded on a blockchain. The money stays on the bank’s balance sheet, keeps its FDIC insurance, and follows existing banking regulations. What changes is how it moves: instead of batch settlement windows and legacy payment rails, tokenized deposits can settle instantly, around the clock.
How the BitGo and ZKsync stack works
The system pairs BitGo’s institutional custody and wallet infrastructure with ZKsync’s Prividium, a permissioned, privacy-preserving blockchain built for regulated entities. Only approved participants can access Prividium, and every transaction is designed for both speed and regulatory auditability.
The combined stack is already in testing with regulated financial institutions, according to both companies. Broader production rollout is targeted for late 2026.
“Financial infrastructure is undergoing the same transition computing did decades ago, from isolated databases to shared, programmable infrastructure,” said Alex Gluchowski, CEO of Matter Labs, the team behind ZKsync.
The approach matters because it sidesteps stablecoins entirely. Where stablecoin issuers like Tether and Circle operate outside the banking system, tokenized deposits keep funds within the conventional banking perimeter. Banks retain control, depositors retain insurance, and regulators retain oversight.
Five U.S. banks already testing tokenized deposits on ZKsync
The BitGo partnership builds on an existing effort. Earlier in March, CoinDesk reported that five U.S. regional banks are building a tokenized deposit platform called the Cari Network on ZKsync’s Prividium infrastructure. The participating banks are Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp.
The Mid-Size Bank Coalition of America has backed the project. “Banks should be leading the next phase of digital money, not reacting to it,” said Gene Ludwig, CEO of the Cari Network.
The banks are currently testing issuance, transfers, and redemption processes, with a rollout planned for later this year. The Cari Network allows banks to convert customer deposits into digital tokens that move instantly between institutions while remaining within the regulated banking system.
Why tokenized deposits could rival stablecoins
The stablecoin market currently sits near $301 billion in total market capitalization, up roughly 50% year to date. That is real money, but it represents a fraction of the global deposit base.
Citi Institute projects that tokenized bank deposits could support $100 to $140 trillion in annual payment flows by 2030, potentially matching or exceeding stablecoin volumes. Under Citi’s base case, stablecoin circulation reaches $1.9 trillion by 2030, with a bullish scenario of $4 trillion.
The difference comes down to where the liability sits. Stablecoins are issued by non-bank entities and backed by reserves. Tokenized deposits are issued by banks and backed by the same FDIC coverage as a checking account. For institutions moving large sums, that distinction matters.
This trend is accelerating across markets. In Europe, Bitpanda launched its Vision Chain last week to connect EU banks with tokenized assets. Franklin Templeton tokenized five ETFs with Ondo Finance. And Invesco took over Superstate’s $900 million tokenized Treasury fund.
Regulatory tailwinds are helping
The timing benefits from a regulatory environment that is warmer toward crypto infrastructure than at any point since 2020. The SEC and CFTC classified 16 crypto assets as digital commodities this month, drawing clearer lines between securities and non-securities for the first time.
The Clarity Act, which would establish a formal market structure framework for digital assets, is inching toward a Senate Banking Committee hearing in April after a stablecoin yield compromise was reached between lawmakers.
For banks considering tokenized deposits, regulatory clarity reduces the risk of building on infrastructure that could later be reclassified or restricted. The BitGo and ZKsync stack is designed to operate within current banking regulations rather than requiring new ones.
FAQ
What is the difference between a tokenized deposit and a stablecoin?
A tokenized deposit is a bank deposit represented as a digital token on a blockchain. It stays on the bank’s balance sheet and keeps FDIC insurance. A stablecoin is issued by a non-bank company and backed by reserves, but it does not carry deposit insurance or sit within the regulated banking system.
Which banks are testing tokenized deposits on ZKsync?
Five U.S. regional banks are testing the Cari Network on ZKsync’s Prividium blockchain: Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. The Mid-Size Bank Coalition of America has endorsed the project.
When will tokenized bank deposits be available to the public?
Both the BitGo/ZKsync infrastructure and the Cari Network are targeting production rollout in late 2026. The systems are currently being tested with regulated financial institutions, but no public launch date has been confirmed.
