BitGo and ZKsync Partner to Help Banks Tokenize Deposits on Blockchain

TLDR

• BitGo and ZKsync are building blockchain infrastructure to help banks tokenize fiat deposits
• The platform uses ZKsync’s Prividium, a permissioned, privacy-focused blockchain for regulated institutions
• Unlike stablecoins, tokenized deposits keep funds inside the traditional banking system
• The system is currently in testing, with a full rollout planned for later in 2025
• BitGo stock was trading at $10.00, up 2.16% on the day

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BitGo, the digital asset custody firm, and ZKsync, an Ethereum Layer 2 protocol, have announced a partnership to build tokenized deposit infrastructure for banks. The goal is to let financial institutions bring money onto blockchain rails while staying within existing regulatory frameworks.

The platform combines BitGo’s institutional custody and wallet services with ZKsync’s Prividium network. Prividium is a permissioned, privacy-preserving blockchain built specifically for regulated entities.

Together, the two companies are offering banks a ready-made system to issue, transfer, and settle tokenized deposits. This removes the need for banks to build and manage their own blockchain infrastructure.

The partnership targets a gap in the market. Banks want the speed and efficiency of blockchain, but cannot easily use public networks due to compliance requirements.

Tokenized deposits are different from stablecoins. Stablecoins typically exist outside the traditional banking system. Tokenized deposits keep the funds inside it, which makes them easier to fit within current regulations.

Matter Labs, the company behind ZKsync, has been positioning Prividium as a bridge between public blockchain technology and institutional needs. CEO Alex Gluchowski said tokenized deposits are “how banks bring money onchain without leaving the regulatory system.”

What the Platform Offers Banks

The combined system is designed to deliver 24/7 availability, instant settlements, and improved security. It also aims to enable programmable payments, meaning transactions can be automated based on set conditions.

BitGo has been active in the crypto space since 2013. The company is known for developing multi-signature wallet technology, which strengthened security and helped drive institutional adoption of digital asset tools.

This new infrastructure does not require stablecoins. That sets it apart from other blockchain payment efforts, including those led by Ripple Labs, which involve their own digital assets.

The project is currently in a testing phase with regulated financial institutions. A broader production rollout is planned for later this year.

The Stablecoin Debate in the Background

The partnership arrives during ongoing tension between banks and stablecoin issuers. Banks have argued that stablecoin yields draw deposits away from traditional accounts.

The Clarity Act attempted to address some of these concerns, but the debate continued. Coinbase recently rejected a proposed ban on stablecoin yields, keeping the issue unresolved.

The BitGo-ZKsync platform does not directly resolve the stablecoin dispute. But it does offer banks a way to access blockchain technology without using stablecoins at all.

The traditional finance market the platform is targeting is estimated at $450 trillion.

BitGo Holdings, Inc., BTGO

BitGo stock was trading at $10.00 at the time of writing, up 2.16% from the previous closing price.

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