BitGo and zkSync Partner to Support Institutional Tokenized Deposits

BitGo and zkSync have announced a strategic partnership to bring institutional tokenized deposits to the blockchain, combining BitGo’s custody and wallet infrastructure with zkSync’s Prividium, a privacy-preserving, permissioned Layer-2 network anchored to Ethereum.

The partnership, confirmed on March 25, 2026, targets regulated financial institutions seeking to represent fiat deposits directly on-chain without relying on stablecoins. Chen Fang, BitGo’s Chief Revenue Officer, said the integration gives banks “a practical path to modernize settlement and treasury operations” by pairing BitGo’s institutional-grade custody with zkSync’s privacy-preserving network.

The combined stack is already being tested with regulated financial institutions across multiple jurisdictions, with a broader production rollout targeted for later in 2026.

What BitGo and zkSync Each Bring to the Table

BitGo operates as a regulated digital asset custodian and qualified trustee, serving institutional clients globally. zkSync, developed by Matter Labs, runs an Ethereum Layer-2 ZK-rollup network built for scalable, low-cost transactions.

$10B+

Tokenized real-world assets on-chain (2024) — institutional deposits are the fastest-growing segment.

The key product is Prividium, a permissioned ledger that allows verified counterparties to transact privately while anchoring validity proofs to Ethereum’s mainnet. This architecture preserves the security guarantees of Ethereum while restricting access to compliant, vetted participants.

Tokenized deposits in this context are not stablecoins. They represent direct bank liabilities settled on-chain, preserving all regulatory protections of traditional bank money, including FDIC-style coverage. For institutions, this means programmable payments and real-time settlement without leaving the regulated banking framework.

TLDR: Key Points

  • BitGo’s institutional custody infrastructure pairs with zkSync’s Prividium permissioned Layer-2 to enable on-chain tokenized deposits for banks.
  • Tokenized deposits represent direct fiat bank liabilities, not stablecoins, keeping them within existing regulatory frameworks.
  • The platform is in active testing with regulated institutions, with full production rollout expected by end of 2026.

Why Institutions Are Moving Toward Tokenized Deposits

The partnership arrives as a growing number of banks explore on-chain settlement infrastructure. The tokenized real-world asset market surpassed $10 billion in on-chain value in 2024, and institutional deposits have emerged as one of the fastest-growing segments, a trend that mirrors broader momentum in global tokenization initiatives.

A separate but related initiative underscores the institutional appetite. The Cari Network, launched in March 2026, already includes five U.S. regional banks: Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp. All five use zkSync’s Prividium infrastructure. The network is led by former U.S. Comptroller of the Currency Gene Ludwig, signaling a regulatory-forward approach.

The Mid-Size Bank Coalition of America has endorsed the broader tokenized deposit model. Alex Gluchowski, zkSync’s CEO, framed mid-sized banks as the primary beneficiaries: “Financial infrastructure is being redesigned in real time, and mid-sized banks are the ones being left behind. Tokenized deposits are complementary to stablecoins; they are the payment tokens by banks when money needs to move in and out of their infrastructure.”

Unlike stablecoin models from crypto-native issuers, tokenized deposits keep assets governed by chartered banks. Banks retain full control, and regulatory auditability remains intact. This positions the approach as a lower-risk alternative for institutions cautious about compliance exposure, a consideration that matters as exchanges and trading platforms face increasing regulatory scrutiny.

What This Means for On-Chain Finance

Tokenized deposits are not isolated instruments. Once bank liabilities exist on-chain, they can potentially serve as collateral in DeFi protocols, bridging the gap between traditional finance and decentralized ecosystems. For readers tracking digital asset market developments, this represents infrastructure that could connect institutional capital to on-chain markets at scale.

The competitive landscape is heating up. Multiple Layer-2 networks and custodians are pursuing similar institutional partnerships, but the BitGo-zkSync combination is notable for its specific focus on permissioned, compliance-first architecture rather than retrofitting public chain infrastructure for institutional use.

zkSync’s Elastic Chain vision targets interoperability across ZK-powered networks, which could eventually allow tokenized deposits minted on Prividium to move across multiple ZK-rollup chains. BitGo already supports over 500 digital assets, giving the partnership broad ecosystem reach from day one.

$60B+

Digital assets under BitGo custody across 1,500+ institutional clients in 50+ countries.

The Cari Network’s testing phase began in February 2026, and the BitGo-zkSync platform is running parallel pilots with its own set of regulated institutions. Specific participant names have not been disclosed, but production deployment for both initiatives is targeted for later this year.

With five regional banks already onboarded to the Prividium stack and BitGo’s institutional client base spanning 50+ countries, the infrastructure for bank-grade tokenized deposits is moving from concept to deployment faster than many in the industry anticipated.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.