OSFI Clarifies Stance on Tokenized Deposits in Canada
Canada's financial regulator has clarified its stance on tokenized deposits, ruling that they are not distinct from traditional bank deposits. The Office of the Superintendent of Financial Institutions (OSFI) made the announcement on September 10, stating that blockchain-based deposits will be considered liabilities under the same legislative framework as traditional deposits.
The OSFI's position is significant for banks looking to develop digital deposit products using distributed ledger technology. According to the regulator, the substance of financial products is more important than their form, and institutions must ensure that innovation conforms with all relevant regulations.
The clarification does not mean that banks are freed from regulation, but rather provides clearer guidance on how to develop tokenized deposits while maintaining compliance with existing rules. The OSFI has emphasized that technology, cybersecurity, governance, and risk management expectations should be met by institutions, and that they must consult with their lead supervisor prior to introducing novel products and services.