Canada's Big Six Banks Unite for Tokenized Deposit System
Canada's six largest banks have joined forces to develop a Canadian-dollar tokenized deposit system that will enable faster and more efficient interbank transfers. The initiative, announced on September 22, aims to make payments programmable and interoperable with digital asset initiatives.
The first phase of the project focuses on moving tokenized deposits efficiently between the six institutions: Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group. The longer-term ambition is to create a seamless payment infrastructure that can interact with digital assets.
The development of tokenized deposits was made possible by regulatory guidance from the Office of the Superintendent of Financial Institutions (OSFI), which clarified that such deposits would not be treated as a separate asset class due to their use of distributed ledger technology. This guidance removed a major ambiguity that had been holding banks back from experimenting with the technology.
The timing between the OSFI guidance and the Big Six announcement is not a coincidence, with banks typically launching collaborative projects only after receiving regulatory air cover. The decision to launch with all six major banks simultaneously suggests a coordinated strategy, likely shaped by conversations with regulators and Payments Canada.