US regional banks build a tokenized deposit network…ZKsync-based infrastructure

US regional banks are moving to build a blockchain-based tokenized deposit network, intensifying competition to develop payment infrastructure to counter stablecoins. The initiative is seen as an attempt to deliver the speed of digital payments while keeping funds within the banking system.

According to crypto news outlet CoinDesk on the 17th, US regional banks are developing the “Cari Network,” built on the Layer 2 network ZKsync.

Major regional banks participating in the project include Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp.

The Cari Network is designed to convert customer deposits into digital tokens, enabling instant transfers between banks. Funds, however, remain within existing banking systems, with the nature of deposits, the applicable regulatory framework, and depositor protection all kept intact.

That is a key point of differentiation from stablecoins issued by non-bank entities. The strategy is understood as banks seeking to secure competitiveness by delivering 24/7 payments and real-time settlement while maintaining the existing regulatory regime.

The network will run on “Prividium,” a private blockchain developed by Matter Labs, and adopts a permissioned structure accessible only to approved participants. Transactions are designed to ensure fast processing and privacy while still allowing audits by regulators.

Meanwhile, the Cari Network plans to conduct tests of deposit issuance, transfer and redemption functions, targeting an official launch later this year. The Mid-Size Bank Coalition of America is also reported to be supporting the project.