Research Report
How ZKsync's Prividium is enabling regulated banks to issue programmable, always-on digital money anchored to Ethereum
Tokenized deposits represent the next evolution in digital money: bank-issued digital tokens that combine the programmability of blockchain with the trust, insurance, and regulatory framework of the traditional banking system. Rather than replacing existing infrastructure, they extend it onto always-on, programmable rails.
In March 2026, the Cari Network, founded by Eugene Ludwig, the 27th Comptroller of the Currency, announced that five major U.S. regional banks with over $600 billion in combined deposits are building a tokenized deposit network on ZKsync's Prividium. The network targets a Q3 2026 pilot with customer availability by Q4 2026. Separately, ZKsync has partnered with BitGo, a federally chartered digital asset bank, to bring institutional custody and wallet infrastructure to the broader Prividium-based Bank Stack — a distinct partnership serving the same tokenized-deposit use case.
Prividium is purpose-built for institutions that demand privacy, compliance, and full control of their data. By combining private execution with public verifiability through zero-knowledge proofs, it resolves a decade-long trade-off between institutional control and market connectivity. Each Prividium chain sustains up to 15,000 TPS with Settlement Target Finality in approximately one second and proving costs under $0.0001 per transaction. Over 35 financial institutions have validated the architecture across live demos of cross-border payments and intraday repo (per ZKsync's Prividium product page).
The context is clear: $5.7 trillion in adjusted stablecoin volume moved in 2024, proving demand for digital dollars. An estimated $27 trillion sits immobilized in correspondent banking nostro/vostro accounts. The U.S. Treasury's April 2025 report projected that stablecoins could drive up to $6.6 trillion in potential deposit outflows from the banking system, a warning echoed by Bank of America CEO Brian Moynihan in January 2026. 97% of institutional investors surveyed by BNY Mellon agree tokenization will revolutionize asset management, and BCG/ADDX project the tokenized asset market will reach $10-16 trillion by 2030. Tokenized deposits are the banking system's answer: same programmability, same always-on rails, inside the regulatory perimeter.
Stablecoins proved that digital dollars work: $5.7 trillion in adjusted volume moved through them in 2024 alone. Now, tokenized deposits bring those same capabilities into the regulated banking system: programmable, instant, 24/7 settlement on blockchain rails, with the trust, deposit insurance, and regulatory oversight that institutions require. ZKsync's Prividium is the infrastructure making this possible.
Stablecoins demonstrated the demand for always-on digital dollars. Tokenized deposits extend this into regulated banking, preserving deposit insurance, balance sheet treatment, and the ability for banks to pay yield on deposits. These are capabilities no stablecoin offers today, and they matter to the institutions that hold the vast majority of the world's money.
For a decade, banks faced an impossible choice: control (private chains) or connectivity (public chains). Zero-knowledge proofs eliminate this trade-off entirely. Every transaction is private yet publicly verifiable, with no trusted operator in the loop. The proof itself is the guarantee of correctness, replacing organizational trust with mathematical certainty.
Five U.S. banks with $600B+ in deposits are joining the Cari Network, with the Mid-Size Bank Coalition of America's endorsement. In a separate partnership, BitGo brings federally chartered custody to the Prividium-based Bank Stack. Across both tracks, 35+ financial institutions have validated the Prividium architecture in live demos of cross-border payments and intraday repo. The institutional commitment is real, and the timeline is measured in quarters, not years.
Multiple forces are converging to make tokenized deposits both viable and urgent: proven demand for digital money, massive efficiency opportunities in legacy infrastructure, regulatory tailwinds, and the maturation of zero-knowledge proof technology.
The demand for digital money is no longer theoretical. Adjusted stablecoin transaction volume reached $5.7 trillion in 2024 (BNP Paribas/Allium data), proving that the market is ready for programmable, always-on settlement. At the same time, an estimated $27 trillion remains trapped in correspondent banking nostro/vostro accounts, representing one of the largest efficiency opportunities in global finance. The U.S. Treasury's April 2025 report warned that stablecoins could trigger up to $6.6 trillion in potential deposit outflows from the banking system, a figure Bank of America CEO Brian Moynihan reinforced in January 2026. The signal to banks is clear: modernize or cede deposits to non-bank issuers.
The broader tokenization wave is accelerating. BCG and ADDX project the tokenized asset market will reach $10-16 trillion by 2030, and 97% of institutional investors surveyed by BNY Mellon/Celent agree that tokenization will revolutionize asset management. The institutions are not waiting. BNY announced tokenized deposit capabilities in January 2026. Citi confirmed always-on deposit settlement for its clients. JPMorgan has operated JPM Coin since 2019. The question is no longer whether banks will move to programmable settlement, but on what infrastructure.
Reflexivity View: The convergence of proven digital money demand, massive legacy inefficiency, and regulatory clarity creates a window of opportunity. Banks that move now to adopt tokenized deposits on enterprise-grade infrastructure will be best positioned to serve a financial system that increasingly operates 24/7 on programmable rails.
A tokenized deposit is a digital representation of a traditional bank deposit, issued by a regulated bank on blockchain infrastructure. It represents an IOU on the actual deposit, legally treated as a bank liability, remaining on the issuing bank's balance sheet.
A customer deposits fiat into their bank account and receives an equivalent amount of tokens on Prividium. Those tokens can be transferred instantly between verified counterparties, 24/7/365, settling in approximately one second. At any point, the holder can redeem tokens back to USD on demand. Throughout this cycle, deposits remain on the issuing bank's balance sheet as regulated liabilities.
What distinguishes tokenized deposits from other forms of digital money is their legal and financial structure. They are issued by regulated banks and remain on-balance-sheet liabilities, backed by deposits held within the regulated banking system. Banks can pay yield on them, just as they do on conventional deposits. They are programmable through smart contracts, enabling automated treasury workflows, conditional payments, and real-time clearing. They settle near-instantly, 24/7, with full KYC/KYB/AML compliance embedded in the transaction logic and selective disclosure for regulators. And they are interoperable across the Elastic Network and Ethereum ecosystem, functioning as a regulated settlement asset that works across tokenized assets and networks.
Tokenized deposits sit alongside stablecoins and CBDCs as complementary forms of digital money, each serving different users and regulatory frameworks. Stablecoins excel at global, permissionless payments and DeFi. Tokenized deposits bring the same programmability into the regulated banking system, preserving deposit insurance, balance sheet treatment, and the ability for banks to pay yield.
| Attribute | Tokenized Deposits | Stablecoins | CBDCs |
|---|---|---|---|
| Issuer | Regulated bank | Licensed non-bank | Central bank |
| Legal status | Bank deposit (balance sheet liability) | Payment instrument / stored value | Central bank liability |
| Reserves | Fractional (bank can lend against) | Typically 1:1 liquid assets | Central bank backed |
| Deposit insurance | Bank deposit insurance regimes | Typically not insured | Sovereign guarantee |
| Yield | Bank can pay deposit interest | Emerging (regulatory debate) | Policy dependent |
| Primary use case | Institutional payments, treasury | Global payments, DeFi | Retail payments, monetary policy |
"Banks should be leading the next phase of digital money, not reacting to it. Cari is built to modernize payments from within the regulated system."
For a decade, every serious financial institution has been caught between two conflicting constraints. Regulators mandate control: transactions processed under the bank's governance, data inside its walls, full auditability. Markets demand connectivity: real-time settlement, 24/7 availability, every counterparty reachable at the speed of software. Both are non-negotiable. Fail the first and you lose your license. Fail the second and you lose your deposits.
The first serious attempt. JPMorgan Coin settles inside JPMorgan instantly, with full control. The logic was sound: keep execution inside the institution, under its own rules. But competitors will not build their payments infrastructure on a rival's rails. A private chain is only as useful as the network it can reach.
Public chains inverted the problem. Any institution could connect, settle against any counterparty, move money at the speed of software. But positions and counterparty relationships stayed visible on a public ledger in real time. The exposure opened significant risk to bad actors.
Proprietary protocols claimed to thread the needle: private execution, shared settlement, no single institution in control. But settlement requires a trusted third party to order transactions and confirm commits. A bank choosing this path trusts whoever controls the synchronization layer, bound by contract, not math.
A ZK proof is a cryptographic certificate that a transaction was processed correctly, verifiable by any counterparty without revealing what the transaction contained and without depending on any operator to confirm it. The proof is the guarantee. This is what makes Prividium fundamentally different: it achieves both full control and full connectivity simultaneously.
Prividium lets institutions operate a private, permissioned blockchain within their own infrastructure, while anchoring every transaction to Ethereum for security and finality through zero-knowledge proofs.
All transaction activity runs inside the institution's own infrastructure. Balances, counterparty relationships, trade details, and compliance state never leave the private environment. The chain operates as a Validium, executing transactions privately and storing state off-chain in a secure database.
Chain operators can selectively disclose specific data to auditors or regulators without exposing the full ledger. Roles like Trader, Auditor, and Admin are managed through the Admin Dashboard with contract-function-level access control. Only authenticated and authorized users can interact with the network.
Each batch of transactions produces a zero-knowledge proof that attests to validity without exposing any raw data. No transaction inputs, addresses, or calldata are visible or inferable from public data. The proof is the mathematical guarantee of correctness.
Proofs and state roots are posted to Ethereum, providing tamper-proof integrity and trustless settlement. Assets can move between Ethereum and other ZKsync chains using native ZK-based bridges without external custodians.
| Specification | Value | Notes |
|---|---|---|
| Throughput | up to 15,000 TPS | Per Prividium chain; horizontal scalability via parallel chains |
| Block time | Sub-second | 100ms target |
| Settlement Target Finality | ~1 second | Within Elastic Network; Ethereum L1 anchoring takes minutes |
| Proving cost | <$0.0001 | Per transaction |
| Architecture | Validium | State stored off-chain in secure database |
| Authentication | Okta SSO / SIWE | Also supports Keycloak, OIDC |
| Access control | Contract-function level | Role-based via Admin Dashboard |
| Public data | State roots + ZK proofs only | No tx inputs, addresses, or calldata visible |
| Licensing | Open source core + commercial | ZK Stack is MIT; Prividium features require agreement |
| Criteria | Prividium | Permissioned Ledgers | Public Chains |
|---|---|---|---|
| Privacy | Ledger-wide; data visible only to operator + designated parties | Closed-consortium; all members see data | No privacy; all data public |
| Verifiability | ZK proofs verified by Ethereum validators | No public anchoring | Consensus verified by public validators |
| Data access | Selective disclosure with fine-grained RBAC | Role-based only; no selective disclosure | Fully public; all data visible |
| Tx control | Operator manages ordering; validity guaranteed by ZK proofs | Consortium governance; risk of inconsistent enforcement | Censorship-resistant; no policy filtering |
| Compliance | Role-based enforcement + external KYC/AML | Offchain / manual compliance | Handled at application level |
| Interop | Native ETH/ZKsync interop (no bridges) | Limited to consortium or vendor networks | Cross-chain via bridges; no privacy |
The Bank Stack is an institutional architecture for onchain finance: three integrated planes that together provide everything banks need to operate on programmable rails.
At the foundation, Prividium provides private execution while Ethereum provides global settlement. Each institution runs its own chain under its own governance. ZK proofs posted to Ethereum guarantee integrity without revealing transaction data. ZKsync Connect enables atomic DvP/PvP settlement across chains, and Phylax adds deterministic circuit breakers that prevent catastrophic states before execution.
The monetary layer is native to the network. Tokenized deposits sit at its core, alongside fiat-backed stablecoins, tokenized cash equivalents (money market funds), and real-world assets including bonds, equities, and collateralized instruments. These compose with identity and policy controls so new products launch with minimal friction.
The services layer provides everything banks need to operate: enterprise SSO with Okta and OIDC, institutional custody through BitGo and Fireblocks, KYC/AML policy engines, fiat on/off ramps, DeFi primitives for lending and liquidity, and audit-grade logging. Banks re-use existing policy stacks rather than rebuilding from scratch.
"Financial infrastructure is undergoing the same shift computing went through decades ago, from siloed databases to shared, programmable infrastructure."
Founded by Eugene Ludwig, the 27th Comptroller of the Currency, Cari exists to give regulated U.S. banks a compliant pathway to modernize digital payments while preserving deposits within the banking system.
| Design Partner Bank | Total Assets | Headquarters |
|---|---|---|
| Huntington Bancshares | $225B | Columbus, OH |
| M&T Bank Corp. | $214B | Buffalo, NY |
| KeyCorp | $184B | Cleveland, OH |
| First Horizon Corp. | $84B | Memphis, TN |
| Old National Bancorp | $72B | Evansville, IN |
| Combined Total | ~$779B assets | $600B+ IN DEPOSITS |
The Mid-Size Bank Coalition of America (MBCA) has endorsed Cari's approach, reflecting growing interest among regional and community banks in modernizing payments infrastructure consistent with safety, soundness, and customer trust.
"Mid-size banks' deposits directly support small-business lending and community growth. Cari's model keeps deposits on bank balance sheets while enabling modern settlement capabilities, allowing banks to leverage their collective scale responsibly."
The tokenized deposits ecosystem requires more than blockchain infrastructure. It demands institutional-grade custody, operational safety controls, and enterprise wallet integration.
BitGo is a federally chartered digital asset bank with full, unconditional OCC approval. The partnership integrates BitGo's institutional-grade custody, wallet infrastructure, and regulated digital asset services with Prividium. Together, they provide banks with a secure and compliant foundation to issue, transfer, and settle tokenized deposits, with production deployment targeted by end of 2026.
Phylax adds execution-time safety controls to the Bank Stack. Applications and operators can pre-commit assertions (invariants, limits, policy gates) and enforce them during block building. Transactions that would violate safety conditions are excluded before execution, so catastrophic states are prevented rather than detected after settlement. Deployment is on-prem with no critical-path SaaS dependency.
Fireblocks is already integrated with Prividium. Banks can re-use existing Fireblocks policy stacks for new networks: MPC or HSM-backed wallets, multi-person approvals, transaction limits, segregation of duties, and integration with audit, risk, and insurance workflows.
"This partnership combines BitGo's infrastructure with ZKsync's privacy-preserving network to give banks a practical path to modernize settlement and treasury operations."
Tokenized deposits on Prividium unlock three transformative use cases for regulated financial institutions.
Cross-border rails remain slow, costly, and dependent on intermediaries. Multi-day settlement cycles, 3.6% average global costs, and an estimated $27 trillion trapped in nostro/vostro accounts make this one of the largest efficiency opportunities in finance.
With Prividium, regulated institutions transfer value directly between one another. Transactions settle in approximately one second with zero data exposure on public networks, on-chain compliance (KYC/KYB/AML) embedded in the transaction logic, and Ethereum anchoring for finality.
Collateral mobility is constrained by batch settlement windows, intermediaries, and reconciliation breaks. Institutions hold massive liquidity buffers and miss intraday opportunities because they cannot move and reuse collateral in real time.
Prividium enables real-time, ZK-verified collateral and cash settlement with instant repledging. The result: 30-50% higher liquidity utilization* with settlement in seconds rather than hours, and zero operational risk from manual processes.
Corporate treasuries operate on fragmented systems with batch cycles and slow intercompany flows. Cash visibility across global subsidiaries is delayed, and sweeping funds between entities involves manual processes and T+1 cycles.
Prividium enables programmable wallets held by banks with near-instant transfers, on-chain clearing, and real-time consolidation across global accounts. Smart contracts execute treasury rules automatically: sweeps, forecasting, and liquidity optimization happen continuously at transfer fees under <$0.001.
Zero-knowledge proof technology enables a paradigm shift in financial compliance, from bulk data collection to cryptographic verification.
For decades, financial regulation treated privacy and compliance as a trade-off. You either collect everything, store everything, and monitor everything, or you risk blind spots. That assumption no longer reflects technological reality.
ZK technology enables compliance based on cryptographic verification. Instead of repeatedly transmitting PII, participants provide mathematical proof that required obligations have been met (KYC, KYB, sanctions screening, transaction monitoring) without exposing underlying data.
"Technologies such as zero-knowledge proofs can allow users to prove compliance without handing over their entire financial history or personal details to intermediaries or to the government."
This approach benefits all stakeholders. Individuals gain stronger privacy protections because their personal data is not unnecessarily distributed across counterparties. Enterprises gain the confidentiality required to operate competitive and secure markets without sacrificing compliance. Regulators gain higher quality, tamper-resistant compliance signals that can be audited under established legal processes, improving both consumer protection and national security while reducing the cost of maintaining vast repositories of sensitive financial data.
| Category | Prividium | Public Chains | Legacy DLTs | Messaging Bridges |
|---|---|---|---|---|
| Privacy | Private execution; selective disclosure | No privacy | Private but siloed | Metadata exposure |
| Atomicity | Proof-based; DvP/PvP built-in | Only between public state | No cross-chain atomicity | Asynchronous |
| Control | Full control of governance, rules, participants | Shared public infra | Consortium-bound | Shared operators |
| Interop | Native Ethereum + Elastic Network interop | Only non-atomic currently | Not natively interoperable | Wrapped assets, no native money |
| Metric | ZK Stack | OP Stack | Arbitrum Stack |
|---|---|---|---|
| Proof system | ZK validity proofs | Optimistic fraud proofs | Optimistic fraud proofs |
| Settlement finality | ~minutes (ETH proof) | 7 days (challenge) | 7 days (challenge) |
| Block time | 100ms | 200ms | 100ms |
| Throughput | 15K+ TPS | ~0.05 Ggas/s | 6K TPS |
| Interoperability | Native, sub-second, trustless | Limited | Limited |
| Median tx cost | ~$0.0002 | ~$0.002 | ~$0.001 |
The infrastructure is built. The partnerships are signed. The regulatory environment is the most favorable it has ever been. 2026 is the year tokenized deposits move from concept to production.
The timeline is concrete. In Q3 2026, Cari Network launches its pilot program with the five design partner banks, validating the core token lifecycle: issuance, transfer, and redemption. By Q4 2026, the network targets customer-facing availability, initially for inter-bank money movement. BitGo's production infrastructure deployment follows by year-end. In parallel, the CLARITY Act and broader stablecoin legislation continue to progress through Congress, providing increasing regulatory clarity.
The initial deployment with five banks and $600B+ in deposits establishes the blueprint. As the network proves itself in production, the expansion potential is significant. The MBCA alone represents a coalition of mid-size banks that have already endorsed this approach. The technology is designed for horizontal scalability: each Prividium chain supports up to 15,000 TPS, and multiple chains can run in parallel to meet any level of throughput demand.
Stablecoins and tokenized deposits will coexist as complementary rails in the future of money, each serving critical and distinct roles: stablecoins excel at global, permissionless payments and DeFi integration; tokenized deposits bring the same programmability into the regulated banking system with deposit insurance, balance sheet treatment, and institutional controls. Together, they form a complete digital money ecosystem operating on interoperable blockchain infrastructure anchored to Ethereum.
ZKsync's Prividium is the infrastructure layer that makes the banking side of this equation possible, resolving the decade-long control-vs-connectivity trade-off through zero-knowledge proofs. With the Cari Network deployment, the BitGo partnership, and the Bank Stack architecture, the path from concept to production is clear. Regulated finance is moving onchain.
"Tokenized deposits are how banks bring money onchain without leaving the regulatory system. With BitGo, and powered by Prividium's private infrastructure built for regulated institutions, we're delivering the foundation required for this transition at scale."