Largest Canadian Banks Explore Tokenized Deposits

Canada’s six largest banks are working together to explore a tokenized Canadian dollar deposit system that could enable digital representations of bank deposits to move between financial institutions. The initiative brings together Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group, according to a joint announcement issued Tuesday.

The initial phase will focus on transferring tokenized deposits between Canadian financial institutions, with the possibility of connecting the system to other digital asset infrastructure at a later stage.

Canada’s largest banks explore tokenized deposits

The initiative follows recent regulatory clarification on how tokenized deposits are treated under Canadian law. On Sept. 10, the Office of the Superintendent of Financial Institutions (OSFI) said tokenized deposits are “not legally distinct from traditional deposits,” explaining that the technology underlying a financial product does not determine its legal status.

Tokenized deposits represent funds held with a regulated bank and remain liabilities of that institution. This differs from fiat-backed stablecoins, which are separate digital assets supported by reserves maintained by their issuers. The participating banks said the proposed system could enable faster and programmable payments. Longer-term plans could also see the initiative expanded to include other deposit-taking institutions.

Canada develops wider digital money framework

The project comes as Canada continues developing its regulatory framework for digital forms of money. In March, Canada enacted its Stablecoin Act as part of Bill C-15, establishing a federal regulatory framework for fiat-backed stablecoins

Under the new regime, non-financial institution issuers will be required to register with the Bank of Canada, maintain reserves of at least 1:1 in high-quality liquid assets and allow holders to redeem their stablecoins at par. The framework is expected to take effect in 2027.

Banks and stablecoin issuers face different rules

Canada’s stablecoin framework applies specifically to fiat-backed stablecoins issued by non-financial institutions. Banks and credit unions already subject to prudential regulation are excluded from its scope. Issuers covered by the stablecoin regime will also be prohibited from presenting their tokens as bank deposits or suggesting that they are protected by a public deposit insurance system.

The distinction creates separate regulatory paths for tokenized bank deposits and independently issued stablecoins as Canada develops its approach to digital money.

Sources:

https://cibc.mediaroom.com/2026-09-22-Six-Canadian-banks-explore-development-of-a-secure-CAD-tokenized-deposit-solution

https://www.canada.ca/en/department-finance/programs/financial-sector-policy/canadas-stablecoin-framework.html

https://cointelegraph.com/news/canada-six-largest-banks-explore-tokenized-canadian-dollar-deposits

https://www.osfi-bsif.gc.ca/en/news/statement-tokenized-other-digitally-represented-deposits