Canada’s six largest banks are joining forces on a Canadian-dollar tokenized deposit system. The initiative aims to make bank deposits easier to transfer between financial institutions using digital infrastructure.
The group includes BMO, CIBC, National Bank of Canada, RBC, Scotiabank and TD. Together, they plan to develop an interbank framework for moving tokenized deposits across Canada’s banking system.
Banks Target Interbank Transfers
The first phase will focus on transfers between participating banks. Consequently, the project could address a major challenge facing single-bank tokenized deposit systems.
Transfers between banks require customer payments and separate settlement between financial institutions. Hence, the initiative could help streamline both processes through shared infrastructure.
Moreover, the banks expect other deposit-taking institutions to join the network later. This could expand the system beyond Canada’s largest lenders.
Building Toward Digital Assets
Canada’s banking regulator recently confirmed that tokenized deposits hold the same legal status as conventional deposits. That clarification removes an important regulatory uncertainty.
Additionally, the banks see programmability as a potential benefit of tokenized deposits. Programmable money could support automated payments and more efficient financial transactions.
However, connecting the banking network with external digital asset platforms remains a longer-term objective. Canada’s earlier Project Samara also explored wholesale CBDC settlement for digital bonds.
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