Six of Canada's largest banks — Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group — announced on Tuesday a joint study of a tokenized Canadian dollar deposit system for interbank payments. In its initial phase, the project will focus on transferring tokenized deposits between Canadian financial institutions, with potential future integration into other digital asset systems.

The banks stated that the system is intended to support faster and programmable payments. Over the long term, the initiative is planned to be opened to other deposit-taking institutions.

OSFI Equates Tokenized Deposits with Traditional Deposits

On September 10, the Office of the Superintendent of Financial Institutions (OSFI) clarified that tokenized deposits are “legally indistinguishable from traditional deposits,” emphasizing that technology does not define the legal nature of the product. Tokenized deposits remain an obligation of the regulated issuing bank, unlike fiat-backed stablecoins, which are separate digital assets backed by the issuer’s reserves.

Canada Preparing Federal Stablecoin Regime by 2027

Alongside the banks’ initiative, the country is developing a broader regulatory framework for digital money. In March, as part of Bill C-15, the Stablecoin Act was adopted, establishing federal rules for fiat-backed stablecoins issued by non-financial organizations: mandatory registration with the Bank of Canada, reserves of at least 1:1 in highly liquid assets, and redemption at face value. The regime is expected to take effect in 2027. Banks and credit unions under prudential supervision are not subject to these rules; under the regime, issuers are prohibited from presenting their tokens as deposits or as insured by the government deposit insurance system.