Five US banks trial blockchain to tokenize fiat deposits in $450T push

Five US regional banks have begun testing a new blockchain system for tokenising fiat deposits. The technology, developed by BitGo and ZKsync, aims to bring faster, more secure transactions to traditional banking. It targets a market worth an estimated $450 trillion in global finance. The trial phase launched in February on ZKsync's Prividium, a private blockchain designed for regulated institutions. Participating banks include Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. These firms are testing the system through the Cari Network, which integrates BitGo's custody services with ZKsync's infrastructure.

Unlike stablecoins, tokenised deposits remain within the traditional banking system. The platform promises 24/7 availability, instant settlements, and programmable payments—features rarely found in conventional banking. A full public release is expected later in 2025.

BitGo's role includes providing institutional-grade wallets and custody solutions. Meanwhile, ZKsync's Prividium ensures privacy and compliance for financial transactions. The project avoids reliance on stablecoins, distinguishing it from other blockchain-based payment initiatives. The system is still in its testing phase, but early participants include some of the largest US regional banks. If successful, it could reshape how banks handle deposits, settlements, and security. BitGo's share price rose slightly to $10.00, up 2.16% on the day of the announcement.