Canada's Office of the Superintendent of Financial Institutions (OSFI), which supervises nearly 350 financial institutions and 1,200 pension plans, has clarified its regulatory position on tokenized deposits—digital representations of deposits that can be moved onto public decentralized networks.
In its statement, OSFI adopted a technology-neutral stance, ruling that tokenized deposits are "not legally distinct from traditional deposits." The regulator emphasized that "the underlying technology of a financial product or service does not determine its legal nature," and that regulators focus on what a product or service is rather than how it is built or delivered.
By classifying tokenized deposits as equivalent to traditional deposits under existing law, OSFI has avoided the need for new regulation. Financial institutions offering these products remain subject to current regulatory frameworks and compliance requirements.
OSFI stressed that financial institutions are responsible for ensuring compliance with applicable laws and regulations, including those performed by third parties on their behalf. The regulator encouraged institutions to engage with their OSFI lead supervisors in advance of launching tokenized deposit products and to seek legal counsel before proceeding.
The ruling recognizes tokenized deposits as a specific use case where regulatory clarity on legal permissibility was needed, potentially opening the door for Canadian banks and financial institutions to implement these digital systems.
