Six of Canada’s largest banks said Tuesday they will jointly explore a Canadian-dollar tokenized deposit system, beginning with an effort to move tokenized deposits efficiently between financial institutions. In a joint announcement published September 22, Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group said the project aims to “drive responsible innovation and facilitate broad participation in the digital money ecosystem for the benefit of all Canadians.” The banks stopped short of naming a launch date or a consumer-facing token, describing the work as an exploration of a shared model for Canadian-dollar digital money.
A CAD-based digital money push
The banks framed tokenized deposits as the first step toward “Canadian dollar based digital money solutions.” They said the system is designed to deliver faster, more efficient and programmable payments to Canadian customers while preserving safety, stability and effective regulatory oversight. A longer-term goal is to connect the platform with other emerging digital assets initiatives, the group said in the release.
Interbank transfers come first
The first phase will focus on moving tokenized deposits across Canadian financial institutions rather than issuing any consumer-facing token. The participants said they anticipate including other deposit-taking institutions “at the appropriate time,” leaving the door open for smaller banks and credit unions to join. The announcement follows Office of the Superintendent of Financial Institutions guidance that tokenized deposits carry the same legal status as traditional deposits. The regulator said on September 10 that tokenized deposits would not be treated as a separate asset class merely because they sit on distributed ledger technology, clearing a key hurdle for the banks.
Banks race to tokenize deposits
Tokenized deposits are bank deposits recorded on a distributed ledger, letting balances move between institutions with the finality and legal certainty of conventional settlement rails. Canada’s move lands as lenders worldwide test the same concept; in the UK, Midnight and Monument Bank have launched a tokenized retail deposit program, while US and Asian lenders pursue their own pilots. The idea is part of a broader wave of bank-led digital money experiments that also includes Swift’s cross-border tokenized deposit tests. The six banks said the initiative “reflects a shared view that as digital money evolves globally, Canada’s payments infrastructure must continue to be competitive and secure.”
