TheBlock
Canada's six largest banks are jointly exploring a Canadian-dollar tokenized deposit system aimed at modernizing the country's payments infrastructure. In a joint statement released Tuesday, Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, The Bank of Nova Scotia, and TD Bank Group said the first phase focuses on moving tokenized deposits efficiently across financial institutions.
The banks said the system "seeks to deliver faster, more efficient and programmable payments to Canadian customers while preserving safety, stability, and effective regulatory oversight," and added that other deposit-taking institutions may join at an appropriate time.
Why it matters
The initiative follows a regulatory clarification from Canada's Office of the Superintendent of Financial Institutions, which said earlier this month that tokenized deposits are "not legally distinct from traditional deposits." According to the regulator, "the underlying technology of a financial product or service does not determine its legal nature." That stance removes the core legal ambiguity that has slowed bank adoption of tokenization elsewhere, and the coordinated participation of all six major banks signals this is infrastructure planning rather than a pilot-scale experiment.
Market impact
The project builds on earlier Canadian tokenization work. In March, the Bank of Canada, Export Development Canada, RBC and TD Bank completed Project Samara, a pilot evaluating blockchain technology for government bond issuance and settlement. If the deposit tokenization phase succeeds, programmable Canadian-dollar payments could move into production across one of the world's most concentrated banking systems, setting a template other regulators will watch closely.
Frequently asked questions
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Which Canadian banks are exploring tokenized deposits?
Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, The Bank of Nova Scotia, and TD Bank Group are jointly exploring the Canadian-dollar tokenized deposit system.
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How did OSFI's clarification enable the tokenized deposit project?
OSFI said earlier in the month that tokenized deposits are not legally distinct from traditional deposits, and that a product's underlying technology does not determine its legal nature, removing regulatory ambiguity around the banks' plan.
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What is the first phase of the banks' tokenized deposit system?
The first phase involves moving tokenized deposits efficiently across financial institutions, with the stated aim of faster, more efficient and programmable payments while preserving regulatory oversight.
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Will other institutions be able to join the Canadian tokenized deposit system?
Yes. The banks said the initiative may include other deposit-taking institutions at an appropriate time, though no timeline was given.
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How does the project relate to Project Samara?
It builds on earlier Canadian tokenization efforts. In March, the Bank of Canada, Export Development Canada, RBC and TD Bank completed Project Samara, a pilot evaluating blockchain for government bond issuance and settlement.
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