Digital Money Network
Canada’s Six Largest Banks Jointly Explore Tokenized Deposits for Faster Payments
Anonymous
Key Points
1
The tokenized deposits could allow money to move and settle almost instantly and around the clock, according to Bloomberg.
2
The tokens would represent a direct, one-to-one claim on cash held in traditional bank deposits and would be issued by regulated commercial banks on a blockchain.
3
The banks said the initiative reflects a shared view that Canada’s payments infrastructure must remain competitive and secure as digital money develops globally, with the project intended to support responsible innovation and broad participation in the digital-money ecosystem.
Canada's six largest banks are jointly building a tokenized deposit system that could speed up payments and make money move almost instantly around the clock, Bloomberg reported. The banks—Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group—launched the exploratory initiative on September 22, 2026, just 12 days after Canada's banking regulator confirmed that tokenized deposits are legally equivalent to traditional bank deposits.
Tokenized deposits are digital representations of conventional bank money recorded on blockchain systems. They would represent a direct, one-to-one claim on actual cash held in traditional bank accounts and issued by regulated commercial banks. The banks say the project reflects their shared belief that as digital money evolves globally, Canada's payments infrastructure must continue to be competitive and secure.
How Tokenized Deposits Work on Blockchain
Unlike private stablecoins issued by non-bank companies, tokenized deposits remain direct liabilities on commercial bank balance sheets. Each token would represent actual money sitting in a bank account. Claire Célérier, Canada Research Chair in Household Finance at University of Toronto Rotman School of Management, explains: My understanding is that the six banks will share the same blockchain, and so it implies that transactions can be made instantaneously across wallets with tokens.
The system enables instant settlement without waiting for traditional banking hours or manual processing. Money can move 24 hours a day, 7 days a week, and transactions would settle almost immediately. This differs sharply from conventional bank transfers, which often take one to three business days.
Regulatory Approval Cleared the Path Forward
Canada's banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), issued supervisory guidance on September 10, 2026, stating that tokenized deposits are not legally distinct from traditional deposits. This legal clarification removed a major barrier to bank testing. The underlying technology of a financial product or service does not determine its legal nature, OSFI explained. We focus on what the product or service is, not how it is built or delivered.
The timing was critical. Just 12 days after OSFI's guidance, the Big Six banks announced their joint initiative. The regulator's stance signaled that blockchain technology for deposits would receive the same regulatory treatment as any other banking product, providing confidence for large commercial banks to proceed.
First Phase Targets Large Corporate Treasuries
The initial rollout will focus on transfers between the six founding banks. Larger companies with accounts across multiple Canadian banks stand to benefit most. What I expect is that these tokenized dollars will be mostly used by large companies who have accounts across these Canadian banks, and it will be used to move large amounts of money, Célérier noted.
Phase 1 will test interbank transfers of tokenized Canadian dollars across a shared blockchain system. Phase 2 could expand access to smaller deposit-taking institutions like credit unions and connect the network to other digital-asset programs. The added efficiency could lower transaction costs and enable automated, conditional payments for corporate treasuries.
Canada Joins Global Wave of Bank-Led Tokenization
The Big Six initiative mirrors similar efforts worldwide. JPMorgan launched JPM Coin for wholesale client transfers. The Federal Reserve has explored tokenized payment systems, and European banks have tested blockchain-based settlement networks. Canada's move positions the country as a leader in regulated, bank-backed digital money.
Unlike private stablecoins such as USDT or USDC—which rely on non-bank companies to issue tokens—Canada's tokenized deposit system keeps control within the banking system. Money remains insured and regulated by existing authorities. This preserves safety, stability, and effective regulatory oversight, the banks stated in their joint announcement.
Sentiment
Mostly PositiveNEGATIVENEUTRALPOSITIVE
Publishers
44
Articles
69
Reach
113
A
AnonymousAuthor
