Canadian Banks Launch Tokenized Deposit System for Interbank Payments
Canada's largest banks are exploring a tokenized deposit system for interbank payments. This initiative involves six major lenders - Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group.
The system allows digital representations of bank deposits to be transferred between financial institutions, aiming to support faster and programmable payments.
This comes after the Office of the Superintendent of Financial Institutions (OSFI) provided clarity on the legal treatment of tokenized deposits. On September 10, OSFI stated that tokenized deposits share the same legal status as traditional deposits and that technology does not alter their legal nature.
The Stablecoin Act, enacted in March via Bill C-15, requires non-bank stablecoin issuers to register with the Bank of Canada and hold 1:1 reserves by 2027. However, tokenized bank deposits are on a separate supervisory track.