Canadian Banks Team Up for Instant Tokenized Deposits

Canada's six biggest banks, RBC, TD, BMO, Scotiabank, CIBC, and National Bank, have formed a joint plan to create a shared Canadian-dollar tokenized deposit infrastructure. This project will enable instant transfers between the participating institutions, aiming for a more efficient and competitive banking system.

The first phase of this initiative will focus on transferring deposits within the banks themselves, rather than into consumer wallets. Tokenized deposits are essentially digital representations of regular bank deposits on a shared ledger, using the same money, rules, and safeguards as commercial bank money.

This collaborative effort is separate from the Bank of Canada's shelved digital-dollar consultation, where 85% of nearly 90,000 respondents expressed disinterest in a hypothetical digital Canadian dollar. The banks want their system to be competitive and secure while maintaining existing safeguards.