US regional banks build tokenised deposit network

First Horizon, Huntington Bancshares, KeyCorp, M&T Bank and Old National Bancorp will pilot the Cari Network in the third quarter ahead of a planned roll out for their customers in Q4, says the venture’s CEO and former Comptroller of the Currency Gene Ludwig.

The network aims to let regional and community banks offer their clients similar functionality to stablecoins. However, with deposit tokens mirroring normal banking liabilities, the tokens will be subject to bank regulations and be FDIC insured.

According to Bloomberg, the network will at first be used to move money between the participating banks’ own customers. However, Cari could later be connected to other networks.

In a LinkedIn post, Ludwig says: “Innovation in digital assets should strengthen, not displace, the regulated banking system. Tokenised deposits, built on sound blockchain infrastructure, can modernize payments while keeping insured deposits at the core of economic activity.”