Canada's six largest banks are exploring a shared interbank tokenized deposit system designed to accelerate money transfers between financial institutions. The joint venture includes Bank of Montreal, CIBC, National Bank, RBC, Scotiabank, and TD Bank Group.
The banks plan to test the movement of tokenized deposits between participating institutions. The system could enable faster, programmable payments while maintaining customer funds within the regulated banking system and preserving existing banking controls and oversight.
First Phase Testing and Timeline
The initial phase will focus on moving tokenized deposits among the participating banks, with potential for additional Canadian lenders to join later. The banks have not committed to issuing a tokenized deposit and have not announced a launch date. The project remains exploratory, with next steps dependent on testing results, technical design, regulatory requirements, and whether participants decide to move from trials to a common network.
Tokenized Deposits vs. Stablecoins
Tokenized deposits represent money customers already hold at banks, distinguishing them from stablecoins issued by cryptocurrency companies. A shared network would allow banks to process payments around the clock while retaining existing banking controls.
Global Context
The Canadian initiative follows similar efforts internationally. A U.S. Bank stablecoin pilot used Stellar for a live cross-border payment between bank entities in North America and Europe. In March, the Bank of Canada, RBC, and TD conducted a test issuing, trading, and settling a C$100 million bond using tokenized wholesale Canadian dollars on distributed-ledger infrastructure.
The European Central Bank recently introduced Pontes for tokenized asset settlement using central bank money, connecting distributed-ledger networks with the Eurosystem's existing TARGET payment infrastructure.
