Canada’s six largest banks explore tokenized Canadian dollar deposits

Canada’s six largest banks — Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group — announced a joint effort to explore tokenized Canadian dollar deposits that can move between financial institutions. The banks said the first phase of the initiative will concentrate on interbank transfer of tokenized deposits, with potential future connections to other digital-asset systems. The announcement comes shortly after the Office of the Superintendent of Financial Institutions clarified the legal status of tokenized deposits. In an Sept. 10 statement, OSFI said tokenized deposits are not legally distinct from traditional deposits and emphasized that the underlying technology does not alter a product’s legal nature. That guidance underscores that tokenized deposits remain liabilities of the issuing bank. The banks described the system as intended to support faster and programmable payments. They also said longer-term plans could include making the initiative available to other deposit-taking institutions, indicating a possible expansion beyond the six founding banks. The project sits alongside Canada’s broader work on digital-money rules. In March, lawmakers passed the Stablecoin Act as part of Bill C-15, establishing a federal framework for fiat-backed stablecoins issued by non-financial institutions; that regime requires issuers to register with the Bank of Canada, hold high-quality liquid reserves at least 1:1, and provide redemption at par, and is expected to take effect in 2027. The stablecoin framework excludes banks and credit unions already subject to prudential regulation and prohibits covered issuers from representing their stablecoins as deposits or as insured under a public deposit-insurance system.