NEW YORK — Five U.S. regional banks are collaborating with a blockchain-based platform led by former Comptroller of the Currency Eugene Ludwig to build a shared tokenized-deposit network aimed at modernizing payments while keeping deposits inside the regulated banking system.
The project, being developed with Ludwig’s Cari Network, is expected to roll out a minimum viable product by late March, followed by a pilot program in the third quarter and broader availability to customers in the fourth quarter, according to statements reported by multiple financial news outlets.
Participating banks include First Horizon, Huntington Bancshares, KeyCorp, M&T Bank and Old National Bancorp, which have been working as initial design partners on the initiative.
Digital Representation of Traditional Deposits
Tokenized deposits are digital representations of conventional bank deposits issued on blockchain infrastructure rather than cryptocurrencies. They remain bank liabilities and can be covered by Federal Deposit Insurance Corp. protection, distinguishing them from stablecoins or other digital assets issued outside the banking system, according to analysts.
The banks involved in the new network said it is initially designed to move funds only between customers of the participating banks, with the potential to connect to other payment networks later. They added the effort is also intended to enable faster, always-on settlement and more frictionless money movement as financial institutions adapt to the growing use of digital assets.
‘Strengthen, Not Displace’
In a statement, Ludwig said innovation in digital assets should “strengthen, not displace, the regulated banking system,” and that tokenized deposits are a way to modernize payments while keeping insured deposits central to economic activity.
