Canada's Big Banks Collaborate on Shared Token Network
Canada's six largest banks are working together to create a shared settlement rail for Canadian financial institutions. The project, announced on September 22, aims to support faster and more efficient payments while maintaining existing safeguards and regulatory oversight.
The banks involved in the initiative are Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group. The initial phase will allow these institutions to transfer tokenized deposits between each other.
Tokenized deposits represent claims on deposits held at commercial banks. While the project is still in its early stages, it has the potential to support programmable payments and reduce costs for financial transactions.
The Office of the Superintendent of Financial Institutions noted that tokenized deposits are not legally distinct from traditional deposits, and banks must comply with applicable laws before introducing related products.