Canada's Six Largest Banks Launch Joint Tokenized Deposit Initiative

Canada's Big Six banks unite on tokenized deposits

Six of Canada's largest banks have joined forces to explore a shared Canadian-dollar tokenized deposit system designed to move money faster between financial institutions. The initiative was announced by TD Bank on Tuesday, and includes Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and Scotiabank.

The banks said more institutions could join the project later. Their first phase focuses on moving tokenized deposits across participating banks, with a longer-term goal of connecting to other emerging digital asset initiatives.

Key numbers

• Six major Canadian banks are participating in the joint venture.
• The project's first phase tests transfers of digital representations of bank deposits between institutions.
• The banks aim to enable 24/7 programmable payments while keeping customer funds within the regulated banking system.

How the banks describe the project

The participating banks said the project aims to offer faster, more efficient and programmable payments to Canadian customers while preserving financial stability and regulatory oversight. The joint statement said: "The first phase of the project aims to move tokenized deposits efficiently across Canadian financial institutions with a longer-term goal to connect with other emerging digital assets initiatives."

Tokenized deposits are digital representations of money and other assets already held at a bank, rather than separate stablecoins issued by a crypto company. A shared system could enable Canadian banks to test round-the-clock programmable payments while keeping customer funds within the regulated banking system.

What is happening globally

Canada's move comes as banks worldwide race to put deposits on blockchain infrastructure. In the U.S., regional lenders are building a shared tokenized-deposit network, while JPMorgan, Citi and Wells Fargo have pursued their own institutional offerings. Swift has also begun testing tokenized deposits for round-the-clock cross-border payments with banks across six continents.

The initiative adds a payment use case to Canada's growing work on tokenized financial markets. In March, the Bank of Canada, RBC and TD completed Project Samara, which tested issuing, trading and settling a 100 million Canadian dollar (roughly $71 million) bond on a distributed ledger using tokenized wholesale Canadian dollars.

Canada is also developing a domestic stablecoin market. In May, Shopify and the National Bank of Canada backed a regulated digital Canadian dollar intended to operate around the clock.

What is confirmed

• Canada's six largest banks have formed a joint venture to explore a shared tokenized deposit system.
• The first phase focuses on moving tokenized deposits across participating banks.
• The project does not yet commit the banks to issuing a tokenized deposit.
• Project Samara, a prior test involving a 100 million Canadian dollar bond on a distributed ledger, was completed in March.

What is still unclear

The project has not committed the participating lenders to actually issuing a tokenized deposit. It remains unclear when the initiative would move beyond testing, what technical standards will be used, and how many additional banks may join. The exact timeline for connecting to broader digital asset ecosystems has not been disclosed.

Why this matters

The initiative brings together most of Canada's largest banks to explore a common model for digital money on blockchain infrastructure. Rather than leaving Canadian-dollar activity on blockchain networks to stablecoin issuers alone, the banks are testing whether tokenized deposits can offer faster payments while keeping customer funds within the regulated banking system. This could shape how Canadian consumers and businesses interact with digital money in the years ahead.

Sources

• CoinDesk

Read also: Canada's Six Biggest Banks Team Up on a Shared Digital-Dollar Network