Six-Pack of Banks: Canada's Biggest Lenders Pool Tokenized Deposits 💸

Canada's six largest banks are jointly exploring a tokenized Canadian dollar deposit system that would let digital representations of bank deposits move between financial institutions, the lenders said Tuesday. Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group said the first phase will focus on interbank transfers of tokenized deposits, with longer-term plans to open the network to other deposit-taking institutions. Tokenized deposits remain liabilities of the issuing bank, distinguishing them from fiat-backed stablecoins, which are separate digital assets backed by issuer-held reserves.

The initiative follows guidance issued Sept. 28 from the Office of the Superintendent of Financial Institutions, which stated that tokenized deposits are "not legally distinct from traditional deposits" and that a product's underlying technology does not determine its legal nature. OSFI's clarification came less than two weeks before the banks' announcement. The banks described the system as intended to enable faster and programmable payments while maintaining existing safeguards on commercial bank money. Cointelegraph contacted CIBC for additional details but did not receive an immediate response.

The project sits alongside Canada's broader digital money framework. In March, Parliament enacted the Stablecoin Act as part of Bill C-15, creating a federal regime for fiat-backed stablecoins that requires non-financial institution issuers to register with the Bank of Canada, hold reserves of at least 1:1 in high-quality liquid assets and offer par redemption. The framework is expected to take effect in 2027 and explicitly excludes banks and credit unions already subject to prudential regulation. Issuers covered by the regime are also prohibited from marketing their stablecoins as deposits or as insured under a public deposit insurance system.

Cross-border parallels are already in motion. In the U.S., JPMorgan, Citi, Bank of America and Wells Fargo are developing a rival tokenized deposit network through The Clearing House, targeting a first-half 2027 launch, while 39 U.S. state banking associations are building a separate effort called the BankChain Alliance aimed at community and regional lenders. Scotiabank and TD are among 21 banks backing a separate joint U.S. dollar stablecoin also targeting the first half of 2027, meaning the same institutions are simultaneously pursuing tokenized deposits and stablecoins. Separately, BMO went live this year as the first bank on CME Group's tokenized cash platform on Google Cloud, allowing institutional clients to move U.S. dollars around the clock for margin and collateral.

The six Canadian banks have not set a launch date for the new system, and opening it to institutions beyond the founding group remains a stated objective rather than a commitment. Customer-facing changes, if any, would likely run in the background rather than appear in consumer wallets, much as the wiring behind ACH transfers is invisible to users today. The project is separate from Canada's debate over a potential central bank digital currency, a question the Bank of Canada put to public consultation in 2023 and received almost 90,000 responses, with 85% of respondents saying they would not use a hypothetical digital Canadian dollar.