Canada’s six largest banks explore tokenized Canadian dollar deposits
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Canada’s six largest banks—Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group—are jointly exploring a system for tokenized Canadian dollar deposits. This system would enable digital representations of bank deposits to move between financial institutions. The initial focus is on interbank transfers, with potential future expansion to other deposit-taking institutions.
Why it matters
According to the banks, the system aims to support faster and programmable payments. The development follows regulatory clarity from Canada’s banking regulator, which stated that tokenized deposits are legally equivalent to traditional deposits. This could influence how digital money is integrated into established financial systems in Canada.
Key context
The project comes shortly after the Office of the Superintendent of Financial Institutions (OSFI) clarified that tokenized deposits are not legally distinct from traditional deposits and that their technology does not change their legal status. Tokenized deposits remain liabilities of regulated banks, unlike fiat-backed stablecoins, which are separate digital assets. Canada is also building a broader regulatory framework for digital money through its Stablecoin Act, which applies to non-financial issuers and excludes banks and credit unions.
Key numbers and entities
The banks involved are Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group. The regulatory body mentioned is the Office of the Superintendent of Financial Institutions (OSFI). The Stablecoin Act under Bill C-15 was enacted in March, with a regulatory framework expected to take effect in 2027.
What remains unclear
Details about the technical implementation of the tokenized deposit system and timelines beyond the first phase are not provided. Responses from CIBC regarding further information were not available at the time of reporting. It is also unclear how or when the system might connect with other digital asset systems.