Published Apr 23, 2026
Why banks are choosing tokenized deposits over stablecoins | Alex Gluchowski on Crypto in America
Transcript
Host: Joining us now to break this down and tell us about a new partnership in order to make this happen is co-founder and CEO of Matter Labs and the co-inventor of ZKsync, Alex Gluchowski. Welcome on, Alex. How are you?
Alex Gluchowski: Hi. Excited to be here.
Host: All right, very good. I'm glad I asked. Well, welcome to the show. You just announced that you are working with BitGo to help banks bring deposits on-chain compared to stablecoins. TDs are still fairly new in the adoption phase, right? So what are you hearing from financial institutions about what they need to feel comfortable to do this? And I know last week when we spoke on stage at the D.C. Blockchain Summit, we also talked about Cari Network doing this too. So you've got two announcements in two weeks, and they're both on tokenized deposits through banks.
Alex Gluchowski: Yes. So the banks are obviously on the same wave of innovation. They see the progress that's happening in the crypto world, and they are now unblocked by the regulatory enablements. They understand that this is the future — they have to embrace tokenization, and they have to connect to the global markets in a much faster, more modern way than the technologies that they're currently using.
Many banks are still stuck largely in the infrastructure that was built in the 1970s. Many of them are still around COBOL. So they are jumping from this old era directly into the world of stablecoins and 24/7 settlement markets.
They have a much more conservative stance compared to the other players in the crypto world with regard to what they can and cannot do. And the requirements from the banking side — frankly, which was surprising to me — are a lot stricter. They're doing a lot deeper technical diligence on how the systems actually work: what are the underlying trust assumptions, how is privacy actually preserved. They are not comfortable with claims and with promises — they need to see the proof. And this is what we bring them with zero-knowledge proofs.
So maybe we have to unpack the both announcements — the Cari Network and BitGo — what we're doing there. Cari Network has been founded by the amazing Gene Ludwig, who was a former Comptroller of the Currency, which is the highest regulatory body in the US for banks. So he's a legend in the banking world. He understands the requirements and the whole industry very, very deeply.
And it's the first time where five banks together are coming up in the first step to bring tokenized deposits and have interoperability between them. The efforts we've seen earlier were a single bank doing this for their own tokenized deposits. Multiple banks is what creates the network. When you have a single bank, it's not very far from just being the customer of this bank. But when multiple banks come together, this is where the networks start forming, and you really have the interoperability and 24/7 going beyond a single institution.
So for everyone who's watching: tokenized deposits are very similar technologically to stablecoins. You can think of them as stablecoins issued by a bank. The difference is how they are treated legally. A tokenized deposit is treated the exact same way as a normal deposit, so it has FDIC insurance. It has all of the properties of a normal deposit with regard to how it can be managed by the bank. And it stays in the infrastructure — in the security perimeter and AML perimeter — controlled by the bank. But it can go beyond if multiple banks join the network. And because it's the same technology as the stablecoins, you can also interoperate further — like it's the bridgehead which enables the banks to extend.
Host: Alex, if they're so similar, do you see tokenized deposits maybe taking on a larger role than stablecoins in the bank world, at least? Do you think banks will lean into tokenized deposits more than stablecoins in the future?
Alex Gluchowski: I think it's a lot easier for banks to start with tokenized deposits. The requirements they have are, one, they need to preserve privacy. They are obliged by regulation and legislation to keep the transaction data of the users private and their accounts private. And today, on the public chains, this is not really possible. Specifically for deposits, displaying inflows and outflows of a bank has been flagged by regulators as a systemic risk for the banking system because it could provoke bankruptcy. So privacy is one.
Two, they need to preserve full control over their part of the infrastructure. Many banks would not be comfortable today of going on the public chains even if those provided privacy, because they have internal forces — as I said, they are very conservative. So it's still harder to convince a banking compliance and risk department to embrace blockchain technologies.
What we offer them with Prividium really satisfies all of the checks. Prividium is really loved by compliance and risk people, because it works internally very similar to an internal banking system, with the difference that you have the connection to the global crypto world.
Host: What is compelling smaller regional banks in the US to step into this? Because a lot of times in these headlines — not necessarily in this instance, but across the board — it's always really big banks, but right now it's regional banks, which is interesting.
Alex Gluchowski: I was also surprised that the regional banks would move faster. And the reason for this is they need connectivity. They need to come together, they need alliances more than large players. And they want better rails for settlement between the banks. Their customers have demands for 24/7. They understand that they have to innovate, and the early adopters of these technologies will have a say in how the design of these protocols is shaped. If they wait for the large players to set the terms and the rules of the game, they will eventually pay the costs and all of the benefits will accrue to the early adopters. And I think they realize that.
A large role in that is played by the visionary leadership of Gene and the Cari Network, who managed to build this coalition. And I know that they have a lot more banks in the pipeline willing to join the network, and we'll see this announcement very soon.
Host: Alex, I know this is a huge design space and there's a lot of room to grow and do innovative things here. For our viewers, how would you compare something like what you guys are doing to the Canton Network, which I think got a lot of fanfare and initial traction on being one of these institutionally suitable sort of options? How do you guys think about that comparison?
Alex Gluchowski: That's a great question. We hear this question a lot. Frankly, I would not categorize Canton as a blockchain. They are more like a distributed database interoperability protocol where most of the relations are managed contractually. So they do use technology for enforcing certain rules, but the privacy guarantees are essentially contractual unless you only have a bilateral agreement between the two parties.
What we offer with Prividium is the way to access public permissionless blockchains on the terms of the institutions that are joining them. So we give them this truly hybrid solution where they have their private space connected to Ethereum, and from Ethereum to every other blockchain with interoperability protocols, and to the public markets on Ethereum — and privacy secured by cryptography, rather than contractual obligations.
Zero-knowledge proofs offer you a layer of integrity on top of their existing banking systems. So they have all of the security enforcement of traditional infosec providers that they use, but they have this layer of incorruptibility — the mathematical integrity guarantees on top — which makes this really work like a blockchain system with atomic settlement between different banks and with connection to the global markets.
Host: Alex, you said this is already being tested. So what needs to happen for this to move into full-scale production, for this to really kick off?
Alex Gluchowski: It's just a matter of implementation. The work is underway, and it's going to go live in due time as we roll out the technology. We have a tight roadmap. Cari has more partners to onboard, and at this point it's just a matter of engineering.
The regulatory clarity has been provided and business decisions have been made, and this has significantly impacted the quality of the inbound that we are now getting from other participants. I'm here in New York at DAS this week and we had a lot of conversations with banks who finally see a path for them to embrace these technologies in a regulated, compliant way — which was not possible before. This is very encouraging.
Host: Great. Well, congrats on the move, and thank you for joining us, Alex.
Alex Gluchowski: Yeah, thanks.
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