Canadian Banks Explore Tokenized Deposits for Faster Digital Payments
Canada's big banks are exploring the development of Canadian dollar-based digital money through tokenized deposits. This initiative aims to provide faster, more efficient, and programmable payments to Canadian customers while maintaining safety, stability, and effective regulatory oversight.
The six participating banks, Bank of Montreal, CIBC, National Bank, Royal Bank, Scotiabank, and TD Bank, will share a common blockchain for the project. Claire Célérier, Canada Research Chair in household finance at the University of Toronto's Rotman School of Management, explains that Canadian dollars could be converted into tokens on blockchain for easier transfers.
The tokenized deposits would be issued by commercial banks and treated as traditional bank deposits from a legal perspective. The first phase of the project focuses on moving tokenized deposits between Canadian financial institutions.