On March 25, 2026, digital asset custody leader Bitgo and Ethereum Layer-2 scaling solution Zksync announced a strategic partnership to deliver a privacy-preserving, blockchain-based infrastructure for regulated financial institutions to issue and settle tokenized deposits. The collaboration integrates Bitgo's institutional custody and wallet services with Prividium, Zksync's privacy-focused blockchain platform, enabling banks to create digital representations of traditional liabilities without moving funds outside the existing banking system.
Technical Architecture: Privacy-First Compliance Infrastructure
At the core of this partnership is Prividium, a zero-knowledge (ZK) powered network designed specifically for regulated entities. Bitgo contributes its institutional-grade custody and multi-party computation (MPC) wallet technology, while Zksync provides the privacy layer and high-throughput execution environment. The combined infrastructure allows banks to tokenize deposit liabilities and execute always-on settlement and programmable money movement through smart contracts, while maintaining full compliance with KYC/AML and other regulatory oversight.
According to the announcement, the unified technology stack ensures banks can integrate tokenized deposits into existing payment and treasury operations without overhauling core banking systems. Unlike stablecoins issued by non-bank entities, these tokenized deposits are directly backed by bank balance sheet liabilities, combining the finality of central bank money with blockchain's efficiency and transparency.
Testing Progress: Multiple Institutions Involved, Production by End of 2026
The joint infrastructure is currently undergoing testing with several regulated financial institutions in their respective jurisdictions. Both companies reported positive progress and indicated that the platform is moving toward broader production deployment, which is expected to occur by the end of 2026. Once live, bank clients will be able to issue, redeem, and transfer tokenized deposits through a fully regulated platform, bypassing reliance on non-bank stablecoins or third-party settlement networks.
Chen Fang, Chief Revenue Officer at Bitgo, stated: “This partnership combines Bitgo’s infrastructure with Zksync’s privacy-preserving network to give banks a practical path to modernize settlement and treasury operations. We are building a compliant bridge between traditional finance and on-chain finance.” Zksync emphasized that Prividium's privacy features ensure transaction data is transparent to authorized parties while remaining opaque to unauthorized viewers, meeting banks' strict data confidentiality requirements.
Industry Significance: The Tokenized Deposit Race Heats Up
Tokenized deposits are widely seen as the next major milestone in bank digitalization after stablecoins. Central banks and regulators such as the BIS and FCA have begun exploring frameworks for tokenized liabilities. The Bitgo-Zksync partnership combines a trusted custodian with Ethereum-scale programmability, offering banks an end-to-end tokenized deposit solution that prioritizes privacy and regulatory compliance. This approach directly addresses banks' demand for confidential transaction processing, setting it apart from many existing projects.
Notably, Bitgo recently also partnered with Susquehanna Crypto to launch an OTC gateway to prediction markets for institutional clients, highlighting its multi-pronged strategy to serve institutional needs. The Zksync collaboration further cements Bitgo's role as a key bridge between traditional finance and decentralized finance.
As the target production date of end-2026 approaches, tokenized deposits could become a critical tool for banks to enhance payment efficiency and reduce settlement risk. The Bitgo-Zksync stack is positioning itself as a compliant, secure, and scalable foundation for this emerging paradigm.