Canada�s biggest banks test tokenized deposits

TLDR

Canada's six largest banks are jointly piloting tokenized Canadian dollar deposits on blockchain rails to modernize payments while keeping funds inside the regulated banking system.

1. Bank of Montreal, RBC, TD, Scotiabank, CIBC and National Bank are testing an interbank tokenized deposit system for faster, programmable CAD payments.
2. Tokenized deposits stay as bank liabilities and sit alongside a new Canadian stablecoin framework, creating two distinct tracks for digital Canadian dollars.
3. Next steps to watch include tech choices, links to digital asset networks and whether banks open these rails to fintechs and crypto venues.

Deep Dive

1. How The Tokenized Deposit Pilot Works

Canadas Big Six banks have announced a shared project to move tokenized Canadian dollar deposits between institutions using a common blockchain-based ledger, starting with interbank transfers only, not retail use. Reports from outlets like Cointelegraph describe a first phase focused on internal Canadian transfers of digital representations of existing bank balances, with 24/7 availability and programmable payment features. The initiative is exploratory, with no firm launch date or commitment yet to issue tokenized deposits more broadly.

Unlike a stablecoin, each tokenized deposit represents money already held at a commercial bank and remains a liability on that banks balance sheet, while the ledger technology is just the transport and logic layer for moving those claims.

2. Bank Deposits Versus Stablecoins In Canada

On 10 Sep, Canadas banking regulator OSFI clarified that tokenized deposits are not legally distinct from traditional deposits, meaning the technology does not change legal status, insurance or prudential rules. In parallel, Canada has passed a Stablecoin Act (part of Bill C-15) that, from 2027, will regulate fiat-backed stablecoins issued by non-bank entities, requiring 1:1 high-quality liquid reserves and banning them from being marketed as bank deposits.

That creates a clear split: bank-issued tokenized deposits for regulated payment rails, and non-bank stablecoins for broader crypto and DeFi use, each with different risk profiles and oversight.

3. What To Watch Next For Crypto

So far, the pilot is institution-only, but the banks explicitly aim to keep Canadas payments infrastructure competitive and secure and plan eventual integration with other digital asset systems. If these rails gain traction and expose APIs to exchanges, fintechs or tokenization projects, Canadian-dollar liquidity on-chain could increasingly flow through bank infrastructure rather than only through stablecoin issuers.

Globally, similar bank-led tokenized deposit and settlement systems, plus central bank tokenized asset platforms like the ECBs Pontes, suggest a broader move to bring regulated money onto blockchain while preserving traditional safeguards.

Conclusion

Canadas biggest banks testing tokenized deposits is a signal that traditional finance is upgrading payments using blockchain without waiting for a retail CBDC. For crypto users, the key story is the emerging coexistence of bank-backed tokenized deposits and regulated stablecoins, and how access to those rails could reshape on-chain CAD liquidity and institutional adoption over the next few years.