Canadian Banks Join Forces on Tokenized Deposit Initiative

Six of Canada's largest banks - Bank of Montreal (BMO), CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group - have announced a joint initiative to explore tokenized deposit systems. The project aims to create a Canadian-dollar digital money system that enables faster, programmable payments with regulatory oversight.

The banks will focus on moving tokenized deposits between financial institutions in the first phase, rather than issuing consumer-facing tokens. This move follows guidance from the Office of the Superintendent of Financial Institutions (OSFI) that clarified tokenized deposits carry the same legal status as traditional deposits.

Tokenized deposits are bank deposits recorded on a distributed ledger, allowing balances to be transferred between institutions with finality and legal certainty. The initiative reflects a shared view among the banks that Canada's payments infrastructure must remain competitive and secure in the face of evolving digital money systems globally.