OSFI Clears Path for Tokenized Deposits in Canada
The Office of the Superintendent of Financial Institutions (OSFI) in Canada has clarified its stance on tokenized deposits, stating that they are not legally distinct from traditional deposits. This decision removes a major point of uncertainty for Canadian banks looking to innovate with blockchain-based banking products.
According to OSFI's official statement, tokenized deposits fall under the same legal framework as regular deposits, governed by the Bank Act, Trust and Loan Companies Act, and Insurance Companies Act. No new regulatory classification or specialized legal framework is required for federally regulated institutions to offer them.
This clarification effectively removes a major barrier for banks that had been hesitant to build blockchain-based deposit products due to legal ambiguity. However, OSFI also made clear that financial institutions remain fully responsible for ensuring compliance, even when using third parties to build or run these products.