On March 25, 2026, crypto custody leader Bitgo and Ethereum layer-2 privacy protocol Zksync (now operating under the name Prividium) announced a strategic partnership to build a blockchain-based infrastructure for tokenized deposits. The collaboration is designed to give regulated financial institutions a secure, compliant framework for managing digital representations of traditional bank liabilities.
Key Pillars: Custody, Privacy, and Compliance
Under the partnership, Bitgo contributes its institutional-grade custody and wallet services, while Zksync provides its privacy-preserving blockchain network (Prividium). Together they form a unified technology stack that allows banks to modernize treasury operations and payments without moving funds outside the existing banking system. The infrastructure supports always-on settlement and programmable money movement, while maintaining strict compliance with local regulatory oversight.
“This partnership combines Bitgo’s infrastructure with Zksync’s privacy-preserving network to give banks a practical path to modernize settlement and treasury operations,” said Chen Fang, Chief Revenue Officer at Bitgo. He emphasized that the demand for tokenized deposits is surging among banks, and that privacy and compliance are critical to adoption.
Tokenized Deposits vs. Stablecoins
Tokenized deposits are blockchain-based representations of traditional bank deposits, issued on the bank’s own balance sheet. Unlike algorithmic stablecoins or fiat-backed third-party stablecoins (e.g., USDC), tokenized deposits remain fully within the issuing bank’s liability structure and are subject to existing regulatory frameworks. The Prividium privacy layer ensures transaction data is only visible to authorized parties, mitigating the risk of sensitive information leakage on public ledgers.
Testing Progress and Deployment Timeline
The joint platform is currently being tested with several regulated financial institutions in their respective jurisdictions. Both firms report that code audits and security assessments are in advanced stages, and they expect broad production deployment by the end of 2026. Once live, banks will be able to issue, redeem, and transfer tokenized deposits through a single interface, with interoperability with existing payment systems such as SWIFT and ACH.
Industry Impact and Outlook
The partnership signals a deepening convergence between traditional banking and crypto infrastructure. Analysts view tokenized deposits as a potential “killer use case” for institutional blockchain adoption, addressing long-standing pain points such as settlement delays, high operational costs, and lack of programmability. Bitgo and Zksync’s combination of top-tier custody and zero-knowledge privacy sets a benchmark for other service providers.
Separately, Bitgo recently launched an institutional OTC gateway to prediction markets in collaboration with Susquehanna Crypto, reflecting its broader strategy to dominate institutional crypto services. As tokenized deposits gain traction, banks may eventually bypass third-party stablecoin issuers and directly participate in DeFi and payment networks using their own digital liabilities.