🔍 Canada’s six major banks team up to move deposits onto the blockchain, with regulators first granting legitimacy

On September 22, RBC, TD, BMO, CIBC, Scotiabank, and the National Bank of Canada jointly issued an announcement saying they want to explore a system for tokenized Canadian-dollar deposits. In the first phase, tokenized deposits will be used to transfer among Canadian financial institutions. The longer-term goal is to connect to third-party digital asset systems.

It’s still money—still deposits. The Canadian-dollar deposits issued by commercial banks are not new coins, and they’re also separate from the Bank of Canada’s digital Canadian dollar. The six banks’ argument is that as digital money moves forward globally, Canada’s payment infrastructure needs to keep up—and it must be secure.

Regulators have given the green light first. Earlier this month, the Office of the Superintendent of Financial Institutions (OSFI) said that technology does not change a product’s legal nature, and that tokenized deposits have no legal difference from traditional deposits. This is regulatory interpretation, not a change to the law. On deposit insurance coverage, CDIC hasn’t given a clear position yet.

In the industry, the past approach was for each bank to play on its own. JPMorgan’s internal version, Citigroup’s internal version, HSBC’s internal version—each did its own thing. That’s simple for a single institution, but complicated across banks. When money moves from Bank A to Bank B, the token needs to move once, and inter-bank settlement also needs to move once. You either go through traditional real-time gross settlement, or use a wholesale CBDC and tokenized reserves.

By teaming up, the six banks are handling the cross-bank step. The announcement leaves the door open, inviting other deposit-taking institutions to join later. No timetable was provided. It also didn’t say how customers would use it—there’s only one phrase: “exploration phase.”

My take is defense. Stablecoins move payments and deposits outside the banking system, and banks don’t object to putting things on-chain—they object to money leaving their ledgers and landing on someone else’s chain. Deposit tokens mean deposits stay on their own balance sheets, and the settlement rails get switched to their own as well.

The market doesn’t care about this kind of news. When I wrote this, the six quote sources put BTC between 86,120 and 86,185, down 0.35% over 24 hours. ETH from three sources was between 2,753 and 2,756, down 0.95%.

Watch two things. First, which other deposit-taking institutions are truly involved in the first batch. For the cross-bank settlement step, whether it uses traditional clearing or tokenized reserves.

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