Canadian Banks Unite to Explore Tokenized Deposits Blockchain

Canada's six largest banks are teaming up to explore digital money, starting with tokenized deposits recorded on a shared blockchain. The initiative involves Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, The Bank of Nova Scotia, and TD Bank Group.

The banks aim to move tokenized deposits efficiently across Canadian financial institutions in the first phase, with a longer-term goal of connecting to other emerging digital assets initiatives. This would allow for faster, more efficient, and programmable payments while preserving safety, stability, and regulatory oversight.

Claire Célérier, Canada Research Chair in household finance at the University of Toronto's Rotman School of Management, described the project as 'really exploratory.' She noted that it would mainly benefit large companies moving large sums through more sophisticated transactions. The banks also called digital money a 'digital ledger to move deposits in a very quick, instant way,' differentiating it from cryptocurrency.

The Office of the Superintendent of Financial Institutions emphasized that tokenized deposits are not legally distinct from traditional deposits, focusing on what the product or service is rather than how it's built or delivered. The Bank of Canada has also been studying and experimenting with tokenized systems to assess trade-offs between different use cases.