Canada’s six largest banks explore tokenized Canadian dollar deposits
The country’s largest financial institutions are exploring tokenized deposits for interbank payments, just weeks after regulators clarified how they should be treated.
Canada's six largest banks are investigating the potential of tokenized Canadian dollar deposits for interbank transactions, following recent regulatory guidance. The joint venture, involving Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group, aims to enable digital representations of bank deposits to transfer between financial institutions.
Initial efforts will focus on intra-bank transfers, with potential expansion to other digital asset systems. The initiative follows regulatory clarification from the Office of the Superintendent of Financial Institutions (OSFI), which stated on September 10 that tokenized deposits are legally the same as traditional deposits. The banks emphasize the technology's potential to facilitate faster, programmable payments.
While tokenized deposits are a liability of the issuing bank, they differ from fiat-backed stablecoins, which are separate digital assets backed by reserves. The broader regulatory framework for digital money in Canada, including stablecoin rules enacted in March, is expected to take effect in 2027, but banks will not be subject to this regime.
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