Canada’s Six Largest Banks Explore Cross-Bank Tokenized Deposits

Canada’s six largest banks exploring a shared system for transferring tokenized Canadian-dollar deposits.

Canada’s six largest banks are exploring a shared system for transferring tokenized Canadian-dollar deposits between financial institutions, with the initial phase focused on determining whether such deposits can move efficiently across separate banking systems.

Bank of Montreal, CIBC, National Bank of Canada, RBC, Scotiabank and TD Bank Group are participating in the initiative. In a joint announcement, the banks said the project is intended to examine how Canada’s payment infrastructure can evolve while maintaining security and competitiveness as digital transactions develop.

The initiative does not yet represent a customer-facing product. The banks have not specified which types of payments could eventually be supported, disclosed the technology that would underpin the system or provided a launch timetable.

Tokenized Deposits Put Interbank Transfers First

A tokenized deposit represents funds held at a bank in digital form. The participating institutions are examining how these digital representations could be transferred between banks rather than remaining confined to a single institution's system.

That distinction is important because many payments involve customers or businesses that maintain accounts at different banks. The project's first phase therefore focuses on the underlying ability to transfer deposits across institutions.

The banks expect tokenized deposits could eventually support payments that are faster, more efficient and programmable while retaining financial stability and regulatory oversight. However, the current initiative is exploratory, and no specific customer service has been announced.

The participating banks also said other deposit-taking institutions could join at an appropriate stage. Any expansion would come after the initial group examines how cross-bank transfers can operate.

OSFI Guidance Shapes Tokenized Deposit Development

The initiative follows guidance from Canada's Office of the Superintendent of Financial Institutions (OSFI) concerning the regulatory treatment of tokenized deposits.

In a September statement, OSFI clarified that tokenized deposits are not legally separate from traditional bank deposits. In other words, representing a deposit through digital technology does not by itself change its legal character.

The regulator also highlighted existing requirements that banks must consider when developing related services, including risks involving technology, cybersecurity and third-party providers.

OSFI expects financial institutions to engage with their supervisors before introducing novel products or services. The banks' work on tokenized deposits will therefore need to account for the existing regulatory framework as they evaluate potential cross-institution transfers.

Project Builds on Earlier Canadian Tokenization Work

The new deposit initiative follows earlier experiments involving tokenized financial assets in Canada.

In March, the Bank of Canada, Export Development Canada, RBC and TD completed Project Samara, an experiment involving a tokenized bond. That project examined how distributed ledger technology could be used for the issuance and settlement of a bond.

Project Samara involved a closed group of investors and focused on a different use case from the latest bank deposit initiative. Rather than examining transfers between banks, it explored the application of tokenization to the bond market.

RBC and TD's participation in both projects illustrates the banks' involvement in different tokenization experiments. The latest initiative broadens participation to all six major Canadian banks while concentrating specifically on the movement of Canadian-dollar deposits between institutions.

Banks Have Not Set a Launch Timeline

The participating institutions have not disclosed the technology that would be used for the proposed deposit system or indicated when the initial testing phase will conclude.

For now, the central objective is to establish whether tokenized deposits can be transferred efficiently between the participating banks while operating within Canada's existing regulatory and risk-management framework.

The possibility of eventually involving additional deposit-taking institutions remains open, but the banks have not provided a timetable for that expansion or described a specific end-user product.

Writer: Marcus Renfield

Crypto Market Analyst & Onchain Writer

Marcus Renfield covers cryptocurrency markets with a focus on onchain data, Bitcoin price action, and emerging market narratives. His writing examines how capital flows, network activity, and broader market structure influence short- and medium-term trends.

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