Last month, five regional banks announced a consortium to support tokenized deposits, called the Cari Network.
The five banks include Key Bank, Huntington Bank, First Horizon, M&T Bank, and Old National Bank. The pilot rollout is planned for Q3 of this year, with full availability anticipated for the following quarter.
The Cari Network is a permissioned Layer-2 blockchain platform, anchored to Ethereum (using Prividium a ZKsync-based ZK rollup from Matter Labs), that enables digital assets representing customer deposits at chartered banks. This includes FDIC insurance.
The Cari Network was founded by CEO Gene Ludwig, a former Comptroller of the Currency and founder of Promontory Financial Group, a regulatory compliance and risk management consulting firm.
Last week, Ludwig stated:
“Innovation in digital assets should strengthen, not displace, the regulated banking system. Tokenized deposits, built on sound blockchain infrastructure, can modernize payments while keeping insured deposits at the core of economic activity.”
The benefit for the banks is relevance, manifested in modernization, deposit retention, new revenue opportunities, and low-cost, competitive service for customers. It also presents an opportunity to challenge established and new stablecoin businesses that offer inexpensive transfers and real-time service.
While the concept certainly holds merit and provides a path for banks that understand change is inevitable and regulatory moats will not last, adoption, usage, and success will be measured by uptake and integration into the broader payments ecosystem.
Radi El Haj, CEO of RS2, says the Cari Network is a meaningful step forward in the modernization of payments, offering speed and efficiency while remaining within the traditional, regulated banking system. He adds that the real test will be in the execution.
“Scaling tokenised deposits requires far more than tokenisation alone. It demands robust infrastructure, seamless integration with existing payment rails and true interoperability across networks. Without this foundation, many initiatives risk remaining limited pilots rather than delivering industry-wide impact,” says El Haj. “We are seeing a broader shift across the industry. Payments innovation is most effective when it strengthens the banking ecosystem rather than attempting to bypass it. This is where modern, modular and cloud-native payment platforms become critical in helping banks deploy new capabilities quickly and safely.”
So banks will need to scale quickly, and regulations will need to be updated for the Cari Network to succeed as a banking platform. Meanwhile, competition is heating up, but it is good for the old banks seeking to compete directly with digital asset-native firms.