Canada's Central Bank Cautious on Tokenized Bonds Despite Efficiency Gains

The Bank of Canada has completed its tokenized bond pilot project, Project Samara, which issued a CA$100 million bond on a distributed ledger platform. The experiment, built on Hyperledger Fabric, integrated separate bond and cash ledgers to enable instant settlement and on-chain secondary market trading.

The pilot found operational efficiency gains, improved data integrity, and reduced counterparty and settlement risk, but these benefits were partially offset by increased system complexity and liquidity costs.

The central bank framed the experiment as a feasibility test, not a policy commitment, and warned that broader adoption will likely be slow due to integration challenges with existing infrastructure and limited appetite among market participants for core infrastructure changes.

The results of Project Samara build on the Bank's earlier Jasper project, which tested distributed ledgers for wholesale interbank payments in 2016. The global trend is evident, with central banks across the EU, Singapore, and Switzerland running similar tokenized bond pilots over the past three years.