Regional US Banks Partner with Cari Network to Tokenize Customer Deposits

Strategic pivot and objectives. Several regional lenders have teamed up to prototype a system that places deposit balances onto a distributed ledger, aiming to create a new payments and custody rail that rivals emerging digital platforms. The consortium—working with the Cari Network—frames the work as a defensive retention strategy to capture customers and fee pools that might otherwise migrate to crypto-first providers or privately issued stablecoins. Internal design discussions began late last year and prototypes are now in early build phases; banks emphasize that on-chain claims would remain bank liabilities and subject to existing depositor protections and prudential oversight.

Technical partners and governance. Participating banks are contributing product and compliance expertise alongside the Cari Network, exploring permissioned ledger architectures and token standards that map directly to insured deposit claims. The group is prioritizing onshore operational control, regulator-friendly governance and integrated identity and compliance tooling so KYC/AML checks can be embedded into settlement flows. That focus reflects practical constraints: uneven legal clarity about on‑chain money, the need to digitalize identity and compliance, and lingering questions around throughput, latency and settlement finality that matter for high-volume flows and custody-integrated products.

Market implications and next steps. If pilots validate legal equivalence, reserve placement and automated compliance, banks could shorten settlement windows, enable programmable deposit features (conditional transfers, instant cross-bank movement) and offer new custody and product layers to institutional clients. Regulators and supervisors are expected to be closely involved as the consortium tests reserve visibility and insolvency sequencing so tokenized deposits do not create counterparty ambiguity. The project also reflects a broader industry trend toward hybrid models—bank-issued, on-chain money under constrained frameworks—that seek to preserve monetary transmission and limit cross-border leakage; failure to resolve legal or infrastructure gaps, however, could push activity onto platform-led rails or private settlement assets instead. Expect phased pilots, continued coordination with supervisors, and possible efforts to codify standards or licensing approaches that other regional banks could later join.