Canadian Banks Launch Interbank Tokenized Deposit Initiative

Canada's six largest banks are launching an interbank tokenized deposit initiative to facilitate faster and more efficient payments between financial institutions. The joint venture, 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 connect with other emerging digital asset initiatives in the future.

The project's first phase will focus on moving tokenized deposits across participating banks. This system allows for 24/7 programmable payments while keeping customer funds within the regulated banking system. Tokenized deposits are digital representations of existing money and assets, rather than separate stablecoins issued by a crypto company.

Canada's move follows similar efforts worldwide, with regional lenders in the US building their own shared tokenized-deposit network. JPMorgan, Citi, and Wells Fargo have also explored institutional offerings. Swift recently began testing tokenized deposits for cross-border payments with banks across six continents.