Canada · Tokenization · Cointelegraph
Canada’s six largest banks explore tokenized Canadian dollar deposits
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The country’s largest financial institutions are exploring tokenized deposits for interbank payments, weeks after regulators clarified how they should be treated.
Key facts
- In March, Canada enacted its Stablecoin Act as part of Bill C-15, establishing a federal framework for fiat-backed stablecoins
- The initiative involves Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group, according to a joint announcement from the banks on Tuesday
- Under the regime, non-financial institution issuers will be required to register with the Bank of Canada, maintain reserves of at least 1:1 in high-quality liquid assets and offer holders redemption
- The country’s largest financial institutions are exploring tokenized deposits for interbank payments, weeks after regulators clarified how they should be treated
Summary
Canada’s six largest banks are jointly exploring a system for tokenized Canadian dollar deposits that would allow digital representations of bank deposits to move between financial institutions. The initiative involves Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group, according to a joint announcement from the banks on Tuesday. The project comes less than two weeks after Canada’s banking regulator provided additional clarity on the legal permissibility of tokenized deposits for financial institutions. On Sept. 10, the Office of the Superintendent of Financial Institutions (OSFI) said tokenized deposits are “not legally distinct from traditional deposits,” adding that the underlying technology of a financial product does not determine its legal nature.