Canada's Big Six Banks Launch Joint Tokenized Deposit Initiative

Canada's six major banks have announced plans to launch tokenized deposits for Canadian dollars. The initiative aims to provide programmability benefits, citing a recent confirmation from the country's banking regulator, OSFI, that tokenized deposits are not legally distinct from conventional deposits.

The participating banks include the Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada (NBC), Royal Bank of Canada (RBC), the Bank of Nova Scotia (Scotiabank) and TD Bank Group (TD). The first phase of the initiative focuses on transferring tokenized deposits across Canadian financial institutions, with a long-term goal to connect with third-party digital asset initiatives.

Tokenized deposit initiatives have been conducted by single banks in the past, such as JP Morgan, Citi, and HSBC. However, these solutions are often simpler but require two steps: moving tokens for customers and interbank settlement via conventional RTGS payments or wholesale CBDCs.