Five US Regional Banks Are Building a Tokenized Deposit Network to Compete With Stablecoins on Their Own Terms

A consortium of five US regional banks announced the Cari Network on March 17, a tokenized deposit platform built on ZKsync’s Prividium infrastructure that is designed to deliver the speed and programmability of stablecoin payments while keeping customer funds inside the regulated banking system.

According to ZKSync press release, the participating institutions collectively hold nearly $780 billion in assets, and the project is led by Gene Ludwig, a former US Comptroller of the Currency.

Who Is Building This and Why

The five banks behind the Cari Network are Huntington Bancshares with $225 billion in assets, M&T Bank at $214 billion, KeyCorp at $184 billion, First Horizon at $84 billion, and Old National Bank at $72 billion. None of them are among the largest US banks by asset size, but collectively they represent a significant portion of the regional banking sector that has the most to lose if stablecoins capture a meaningful share of everyday payments and business settlements.

Ludwig’s framing of the project is precise. The goal is to strengthen, not displace, the regulated banking system. That language reflects a specific competitive anxiety. Stablecoins like USDC and PayPal USD are demonstrably faster than traditional bank transfers for many use cases. If businesses and consumers migrate to stablecoin rails for payments, the deposits that currently sit in regional bank accounts follow them, weakening the deposit base that underpins lending capacity. The Cari Network is a defensive play as much as an offensive one.

The Technical Distinction That Matters

The most important thing to understand about the Cari Network is how it differs structurally from stablecoins, because the distinction is not cosmetic. Stablecoins like USDC are liabilities of their issuer, backed by reserves held outside the banking system. They are not FDIC insured. They do not support credit creation. When a dollar moves into USDC, it leaves the fractional reserve banking system entirely.

Cari tokens are different. They represent standard bank deposit liabilities. The underlying funds remain on the participating banks’ balance sheets, continue to be FDIC insured, and continue to support lending through the fractional reserve mechanism. A customer holding Cari tokens is still a bank depositor in the legal and regulatory sense, not a stablecoin holder.

That distinction matters enormously for the banking system’s economic function. A dollar held in a Cari token can still be lent out multiple times through the credit creation process. A dollar held in USDC cannot. Ludwig’s emphasis on keeping insured deposits at the core of economic activity is not rhetoric. It is a statement about preserving the mechanism through which banks create money and fund the broader economy.

The Infrastructure Behind It

The platform uses Prividium, a permissioned privacy-preserving blockchain stack developed by Matter Labs that is anchored to Ethereum through ZKsync. The privacy layer addresses one of the primary objections banks have historically raised about using public blockchains. On a fully transparent public chain, transaction data is visible to anyone, which creates compliance problems around customer privacy and competitive intelligence. Prividium’s architecture maintains user-level privacy while preserving the regulatory auditability that banks require.

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One of the network’s more elegant design choices is the shared token model. Rather than each bank issuing its own distinct token, all five institutions share a single token that customers access through their individual bank. A Huntington customer and a KeyCorp customer holding Cari tokens hold the same token, making peer-to-peer and business-to-business transfers seamless regardless of which institution each party banks with. That interoperability solves a fragmentation problem that has historically limited bank-issued digital asset adoption.

The Timeline and the Competition

The minimum viable product is being released this month. A pilot program covering issuance, transfers, and redemptions is planned for the third quarter of 2026, with a full commercial rollout targeted for the fourth quarter. That timeline puts Cari in direct competition with an accelerating stablecoin landscape at a moment when the competitive pressure is particularly acute.

The same week the Cari Network was announced, PayPal expanded PYUSD to 70 countries, Mastercard agreed to acquire stablecoin infrastructure provider BVNK for $1.8 billion, and Circle’s stock continued trading near its monthly highs following a 100% gain driven by USDC’s 72% circulation growth. The stablecoin ecosystem is not waiting for bank-issued alternatives to catch up.

Whether tokenized deposits can compete with stablecoins on speed and user experience while retaining the FDIC insurance and regulatory standing that stablecoins lack is the central question the Cari Network is attempting to answer. The banking system’s structural advantages are real. Whether they are enough to win back users who have already experienced the convenience of stablecoin payments is less certain.

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