U.S. Regional Banks Declare War on Tether & Circle with ZKsync-Based Cari Network
A consortium of five major U.S. regional banks has launched a direct assault on the private stablecoin market, unveiling the 'Cari Network'—a ZKsync-powered blockchain rail designed to reclaim the digital settlement layer from dominant non-bank issuers. The move, targeting instant, compliant transactions that keep funds within the FDIC-insured banking perimeter, marks the most aggressive push yet by traditional finance to counter Tether's USDT and Circle's USDC, with participating lenders including Huntington and KeyCorp aiming for a Q3 2026 rollout.
The Regional Bank’s ZKsync Move Explained
Theis not a standard partnership. It is a fundamental re-architecture of howhandle settlements. The consortium includes Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. These institutions are building on “Prividium,” a private, permissioned blockchain developed by Matter Labs, the team behind theLayer-2 network.
Alex Gluchowski, CEO of Matter Labs, clearly framed the shift. “Financial infrastructure is undergoing the same shift computing went through decades ago, from siloed databases to shared, programmable infrastructure,” he stated in the announcement.
The technical distinction here is critical for traders to understand. Stablecoins are bearer assets usually backed by treasuries in a custodial account.on the Cari Network are digital representations of cash that sit directly on the bank’s balance sheet. They move instantly via ZK proofs, but they remain insured and regulated. This allows banks to offer crypto-speed settlement without the regulatory friction of managing a separate stablecoin reserve.
Why Banks Are Moving Now, Not Later
Banks are reacting to an existential threat: the loss of the settlement layer. For years, crypto-native firms have offered 24/7 liquidity, while banks remained bound by banking hours and slow wire transfers. The launch of Cari indicates that traditional finance is no longer willing to cede this ground.
We are seeing a broader trend of incumbents aggressively entering the space. BlackRock just dropped nearly $600 million into Bitcoin, signaling thatadoption has moved from exploration to accumulation. Regional banks, however, are focused less on price exposure and more on infrastructure survival.
Regulatory timing is also a major factor. The window to establish compliance with the standard is closing. Industry executives have warned that the CLARITY Act faces slim odds in 2026 without immediate movement in the committee, leaving banks in a precarious position. By launching a network that leverages existing deposit insurance frameworks, the Cari consortium aims to bypass legislative gridlock and deploy a solution that operates within current laws.
The $8Tn Stablecoin Threat
The target of this operation is the $8 trillion payment market currently being encroached upon by Tether (USDT) and Circle (USDC). Non-bank stablecoins have effectively become the world’s digital dollar, processing volume that rivals major card networks. Iflose the ability to settle payments instantly, they risk becoming mere warehouses for liquidity rather than active payment processors.
This competition is heating up across all chains. Solana is eyeing key resistance levels largely driven by institutional ETF demand and its dominance in high-speed stablecoin transfers. The Cari Network is the banking sector’s answer to this speed.has been slow to materialize, so banks are building a “walled garden” alternative that offers the speed of Solana or Ethereum with the safety of a chartered bank.
Cari CEO Gene Ludwig emphasized that banks “should be leading the next phase of digital money, not reacting to it.” The 2026 rollout will test whether institutional clients prefer the permissionless utility of USDT or the regulatory safety of a bank-issued token.
Will the Cari Network Actually Work?
The Cari Network successfully aggregates liquidity across mid-sized banks. Corporate clients migrate aggressively toto reduce counterparty risk, stripping volume away from USDC and USDT. ZKsync establishes itself as the primary backbone for regulated US finance.
The private network becomes a silo with poor interoperability. Crypto-native users and global traders continue to prefer the permissionless nature of public stablecoins. The banks build a high-speed intranet that fails to connect with the broader liquidity of the global market.
Right now, the success of this project depends on whethervalidates the non-bank model or forces issuers to become full-reserve banks, effectively leveling the playing field for Cari.
