Canada's six largest banks explore Canadian-dollar tokenized deposit system

Canada's six largest banks are jointly exploring a Canadian-dollar tokenized deposit system. The first phase involves moving tokenized deposits efficiently across financial institutions. The banks said the project seeks to deliver faster, more efficient and programmable payments to Canadian customers while preserving safety, stability and effective regulatory oversight. The participating banks are 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 initiative may include other deposit-taking institutions at an appropriate time. Canada's Office of the Superintendent of Financial Institutions said earlier this month that tokenized deposits are not legally distinct from traditional deposits. The office also said that the underlying technology of a financial product or service does not determine its legal nature. In March, the Bank of Canada, Export Development Canada, RBC and TD Bank said they completed a tokenization pilot called Project Samara. The pilot aimed to evaluate blockchain technology's role in government bond issuance and settlement.