Canada's Largest Banks Launch Tokenized Deposit Project

Six of Canada's largest banks—Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group—have partnered to develop a Canadian-dollar denominated tokenized deposit solution. The initiative uses blockchain or distributed ledger technology to record traditional deposits, enabling instantaneous, 24/7 programmable payments between financial institutions. The first phase focuses on efficient interbank transfers, with long-term goals of connecting to other digital asset initiatives.

This project follows the passage of the Stablecoin Act in March and a September 10 ruling by the Office of the Superintendent of Financial Institutions, which clarified that tokenized deposits are not legally distinct from traditional deposits. The move mirrors global trends, including similar efforts by regional lenders in the United States and institutional systems at JPMorgan Chase. Experts suggest the technology will primarily benefit large companies and institutional investors by reducing settlement windows and protecting Canada's economic sovereignty against U.S.-dollar digital assets.

Similar advancements have occurred in the United Kingdom, where UK Finance led the Great British Tokenised Deposit project. British banks including Lloyds, NatWest, Barclays, and HSBC recently completed the first interbank transactions using tokenized deposits for mortgage and marketplace purchases. The Bank of England supports this approach over privately issued stablecoins to maintain monetary sovereignty.