Canada's Big Six Banks Unite to Develop Tokenized Deposit System

Canada's six largest banks are joining forces to develop a tokenized deposit system that would allow for faster, programmable payments between institutions. The project, which includes Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group, aims to move Canadian-dollar bank balances between institutions more efficiently than current payment rails.

The system would provide a shared infrastructure for the participating banks to transfer tokenized deposits, which are digital representations of existing bank money, rather than building isolated tokens for their own customers. This approach is designed to preserve regulatory oversight and financial stability while enabling faster payments.

The project's first phase will focus on moving tokenized deposits among the participating banks, with a longer-term goal of connecting to other digital asset initiatives. The initiative builds on previous efforts in Canada, including Project Samara, which issued and settled a bond worth $71 million on a distributed ledger using tokenized wholesale Canadian dollars.