Canada’s six largest banks are exploring a Canadian-dollar tokenized deposit system that could let digital bank deposits move faster between financial institutions and eventually connect to broader digital asset networks.
The first phase will focus on moving tokenized deposits between Canadian financial institutions, with other deposit-taking institutions potentially joining later.
The project is still exploratory. None of the six banks has committed to launching a customer-facing tokenized deposit product, and no blockchain, launch date, or technical architecture has been announced.
Canada’s Largest Banks Are Building a Common Model
The initiative brings Canada’s biggest lenders together rather than having each bank develop an isolated tokenized deposit system.
The six participants are the following:
- Bank of Montreal
- Canadian Imperial Bank of Commerce
- National Bank of Canada
- Royal Bank of Canada
- Scotiabank
- TD Bank Group
The banks say the goal is to explore digital money infrastructure that can support faster, more efficient, and programmable payments while keeping customer funds inside the regulated banking system.
The first phase will concentrate on transfers between participating financial institutions. In the longer term, banks want the infrastructure to connect with other digital asset initiatives.
What Is a Tokenized Deposit?
A tokenized deposit is a digital representation of money held at a commercial bank.
Unlike a stablecoin issued by a non-bank company, a tokenized deposit remains a liability of the issuing bank. In practical terms, it represents a claim on a conventional bank deposit but can be transferred using blockchain or other distributed ledger infrastructure.
For example, a bank could represent $1 million in Canadian dollars in commercial deposits as digital tokens that can move across an approved network.
The underlying funds would still remain within the regulated banking system rather than being converted into a separate privately issued cryptocurrency.
Tokenized Deposits Are Different From Stablecoins
Stablecoins such as USDT and USDC are generally issued by private companies and backed by reserves designed to maintain a stable value, while tokenized deposits remain direct liabilities of regulated banks.
| Feature | Tokenized Deposit | Stablecoin |
| Issuer | Regulated bank | Usually private non-bank issuer |
| Backing | Existing bank deposit | Reserve assets |
| Holder claim | Claim on issuing bank | Claim subject to issuer structure |
| Main use | Banking payments and settlement | Payments, trading and onchain finance |
| Banking framework | Remains inside bank system | Separate digital asset structure |
Table 1. Tokenized Deposits Versus Stablecoins
Canada’s banks are effectively exploring how traditional commercial bank money can gain some of the programmability and around-the-clock transfer capabilities associated with blockchain without moving deposits outside the banking system.
The First Phase Focuses on Interbank Transfers
Moving tokenized deposits between different banks is more complicated than moving them between accounts at the same institution.
A single bank can maintain its own internal ledger and transfer a tokenized deposit between two customers without needing another bank to settle the transaction.
Interbank transfers introduce another step because the banks also need to settle what they owe each other.
The Canadian initiative aims to explore how that process could work across several institutions using a shared model.
The banks have not yet disclosed whether settlement would ultimately rely on existing payment rails, central bank money, tokenized reserves, or another mechanism.
Canada Recently Clarified the Regulatory Treatment
The project comes shortly after Canada’s Office of the Superintendent of Financial Institutions (OSFI) clarified the regulatory treatment of tokenized deposits.
The OSFI confirmed that tokenized deposits are not legally distinct from conventional deposits simply because they are represented on distributed ledger infrastructure.
That means banks can explore tokenized forms of commercial deposits without automatically creating an entirely new category of money.
Regulatory requirements around capital, liquidity, operational risk and customer protection still apply.
Project Samara Already Tested Tokenized Settlement
Canada has already experimented with some of the infrastructure needed for tokenized financial markets.
Earlier in 2026, the Bank of Canada completed Project Samara, which tested the issuance, trading and settlement of a C$100 million digital bond using tokenized wholesale Canadian dollars.
RBC and TD participated alongside Export Development Canada, and the project tested whether a tokenized security and its cash payment could settle together using distributed ledger technology.
The Big Six project takes a different approach by focusing on commercial bank deposits that could move between several institutions.
That could eventually create a reusable payment layer for tokenized securities, corporate transactions, and other digital assets rather than one isolated settlement experiment.
Why Banks Are Interested in Tokenized Deposits
Traditional bank payments often run on banking hours, settlement windows, and separate messaging systems.
Tokenized deposits could allow some transactions to move continuously on shared digital infrastructure.
Potential applications include the following:
- 24/7 corporate payments
- Cross-border settlement
- Tokenized securities transactions
- Automated treasury management
- Programmable payments
- Settlement between digital asset platforms and banks
Programmability is particularly relevant because transactions can potentially include conditions.
A payment could, for example, execute automatically once another asset is delivered or contractual conditions are met.
The banks have not announced which of these use cases will be included in the initial Canadian tests.
Canada Joins a Global Tokenized Deposit Push
Canada’s project follows similar work by some of the world’s largest banks.
JPMorgan, Citi and other institutions have developed proprietary tokenized deposit or blockchain settlement systems, while SWIFT has been testing a shared blockchain ledger designed to connect financial institutions.
In August, HSBC and Standard Chartered completed a live transaction using SWIFT’s blockchain-based ledger as part of a 17-bank pilot focused on round-the-clock tokenized payments.
Citi has also said its own tokenized deposit infrastructure is already processing billions of dollars per day between several of its branches.
Canada’s approach is notable because all six major domestic banks are building an interoperable model from the start rather than relying entirely on separate bank-specific networks.
The Project Is Not a Digital Canadian Dollar
The initiative should also be separated from the idea of a central bank digital currency (CBDC).
The Bank of Canada would issue a CBDC. Tokenized deposits, by contrast, are issued by commercial banks and represent customer deposits held with those institutions.
The current Big Six project therefore does not amount to Canada launching a digital Canadian dollar, but an attempt to modernize commercial bank money using digital ledger technology.
What Comes Next
The Big Six banks will begin by developing and testing an interoperable Canadian-dollar tokenized deposit model between financial institutions.
Other deposit-taking institutions could join later, and the longer-term plan is to connect the system with broader digital asset initiatives.
Several important details remain unresolved, including which distributed ledger will be used, how interbank settlement will work, when testing will begin, and whether the system will eventually reach corporate or retail customers.
The project will become more significant if the banks move beyond exploration and begin conducting live transactions across the network.
What this means for you: Canada’s largest banks are not launching a new cryptocurrency or stablecoin. They are testing whether ordinary Canadian-dollar bank deposits can move on digital rails while remaining inside the regulated banking system.
