U.S. regional banks are launching a blockchain-based tokenized deposit network. They’re competing with stablecoins and big tech payment platforms, according to a Bloomberg Report.
The platform’s led by former U.S. Comptroller of the Currency Gene Ludwig. It’ll use ZKsync’s Prividium infrastructure. Banks can issue digital tokens representing customer deposits. Those funds stay on their own balance sheets.
Five banks have participated since February. Huntington, First Horizon, M&T, KeyCorp, and Old National. They’ve been designing and testing the network, according to Cari Network.
The Mid-Size Bank Coalition of America is backing the initiative. The goal? Preserve banks’ central role in payments and credit. Stablecoin issuers and tech companies are mounting serious competitive pressure.
“Our tokens are designed to circulate only within a permissioned, bank-governed environment, not in open DeFi markets,” Ludwig said in the announcement.
The network’s built on ZKsync. It’s anchored to Ethereum. The aim is combining blockchain settlement speed with traditional banking regulations.
Prividium functions as a shared ledger. It enables instant transactions between verified parties. Personally identifiable customer information stays within banks’ existing core systems. That separation meets privacy requirements. It maintains the instant settlement capabilities that’ve made stablecoins attractive for payments.
The partnership reflects ZKsync’s strategic shift toward institutional use cases. That’s outlined in its 2026 roadmap. The blockchain protocol is prioritizing privacy features, deterministic control, and native interoperability. Traditional financial institutions need those to satisfy compliance obligations.
For mid-sized banks, the network offers a modernization path. They don’t have to cede deposits to nonbank stablecoin issuers. Customer deposits fund small business lending and other credit products. They’re a strategic asset banks want to protect.
These institutions can create a tokenized deposit system. It stays within the banking sector. They offer blockchain-speed payments. They maintain their role in money creation and credit provision.
According to ZKsync, tokenized deposits will complement stablecoins. Not replace them. They’ll serve as the preferred payment token. Funds move between banks’ private ledgers and the broader crypto ecosystem.
The distinction matters. Tokenized deposits remain liabilities on bank balance sheets. They’re subject to banking regulations. Stablecoins typically represent claims on reserves held by separate entities.
The initiative signals how regional banks are responding to structural changes. The payments landscape has shifted. Speed and low-cost transfers have become competitive differentiators. Crypto-native solutions and technology platforms increasingly dominate those features.
