US banks build tokenised deposit network to guard their turf

Published Thu, Feb 19, 2026 · 06:47 AM

[NEW YORK] US banks, including Huntington Bancshares, First Horizon and M&T Bank, are working to build a tokenised deposit network as financial firms fight to stay relevant amid the rise of digital assets.

The companies, along with KeyCorp and Old National Bancorp, are working with the Cari Network, a blockchain-based platform led by former US Comptroller of the Currency Eugene Ludwig. The five banks were the initial design partners of the network and first discussed its formation in September.

Cari is set for the release of a minimum viable product at the end of March, followed by a pilot program in the third quarter, Ludwig said. The full service is expected to be available for customers of the banks involved in the fourth quarter.

Tokenised deposits serve as digital representations of regular deposits insured by the Federal Deposit Insurance Corporation. Banks have been weighing how to use the technology that normally underpins cryptocurrencies for easier and faster payments, in a bid to stay engaged and defend their core business as they risk losing deposits to the digital-asset industry.

“That’s the beauty of it: When funds remain in deposits, then banks can leverage them for the nature of banking,” which is to provide lending and support the economy, said Huntington chief financial officer Zach Wasserman.

The new network comes as the banking industry works to protect its turf. US financial agencies, meanwhile, are giving digital-asset firms access to functions that had largely been exclusive to regulated institutions or exploring ways to include them, such as through bank charters and Federal Reserve payment accounts.

Many banks say they are also mindful of digital assets’ potential to reshape customer behaviour, and want to stay at the forefront of development.

‘Latest solutions’

“Clients will want money-movement solutions and products and services that meet their future needs, and we want to be positioned to offer the latest solutions as they become available,” a representative for First Horizon said. KeyCorp is also part of the Cari initiative, said a spokesperson for the bank.

While involvement in digital assets could expose banks to elevated compliance risks because of crypto’s use in illicit finance, the banks will start with moving money only between their own customers, which banks are obligated to subject to anti-money-laundering screenings.

Ultimately, the network could be connected with similar networks by other industry groups or serve as a connection point between digital assets and fiat currency, or between different tokens, Wasserman said. Other groups of industry players are in talks about developing something similar, he said, so being part of the Cari Network helps “position Huntington to be as competitive as possible”.

“Blockchain has the potential to significantly enhance financial-services infrastructure, especially across payments and capital markets,” said Matt McAfee, who was appointed M&T’s head of digital assets in June. “M&T is participating in the Cari Network on equal footing with peer banks to explore how tokenised deposits can enable regulated, always-on settlement.”

Among other players in the digital-asset space, Bank of New York Mellon said earlier this year that it launched a tokenised deposit service.

Last year, US President Donald Trump signed the first federal regulatory framework for stablecoins, called the Genius Act. That’s helped spur additional interest in the sector from traditional financial firms.

While the use of tokenised deposits is still at an early stage, banks are working hard to understand how it can be relevant to their customers, said Old National chief executive officer Jim Ryan, who was in the room last September for the initial discussion with representatives from the Cari Network and initial partners.

“I don’t think a tokenised deposit is anywhere near what a cryptocurrency looks like today,” he said, “but I think there could be a real need and high usage because of the speed and frictionless movement of money.” BLOOMBERG