Big Six Banks Team Up to Build Tokenized Deposit Network

Canada's six largest banks are working on a shared tokenized deposit system that enables faster and more efficient payments between financial institutions. This project, which is still exploratory, focuses on moving tokenized deposits between Canadian banks with other institutions potentially joining later.

The participating banks include Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group. The goal is to create a digital money infrastructure that supports programmable payments while keeping customer funds within the regulated banking system.

Tokenized deposits are digital representations of commercial bank deposits that can be transferred using blockchain or other distributed ledger technology. Unlike stablecoins issued by non-bank companies, tokenized deposits remain direct liabilities of the issuing banks and do not create a new category of money.