Canada's Top Banks Explore Tokenized CAD Deposits for Faster Payments
Canada's six largest banks are exploring a system for tokenized Canadian dollar deposits. This initiative involves Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group.
The first phase will focus on moving tokenized deposits between Canadian financial institutions before potentially connecting with other digital asset systems.
This project comes after Canada's banking regulator provided additional clarity on the legal permissibility of tokenized deposits for financial institutions. The Office of the Superintendent of Financial Institutions (OSFI) said that tokenized deposits are 'not legally distinct from traditional deposits' and that the underlying technology does not determine its legal nature.
The banks aim to support faster and programmable payments through this system, with longer-term plans including opening the initiative to other deposit-taking institutions.