Canada’s largest banks have joined forces to explore a shared system for tokenizing Canadian-dollar deposits, a move aimed at keeping the country’s payment infrastructure competitive as digital money technology advances around the world.
Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group announced on September 22, 2026, that they are collaborating on digital money solutions denominated in Canadian dollars. The initial focus is on tokenized deposits — digital representations of ordinary commercial-bank deposits that can be moved using distributed-ledger or similar technology. Under this model, the underlying funds would remain deposits at the issuing bank rather than turning into a separate, crypto-style asset.
The banks described the effort as an exercise in responsible innovation, saying they want to deliver faster, more efficient and programmable payments for Canadian customers while preserving safety, financial stability and regulatory oversight. The first phase of the project will test how efficiently tokenized deposits can move between the participating institutions. Over a longer timeframe, the group hopes to connect the system with other digital-asset initiatives, and additional deposit-taking institutions could be invited to join later.
Legal Status Stays the Same
Despite the new technology, a tokenized deposit does not represent a new form of money in legal terms — it is simply a digital representation of money already held at a regulated bank. Canada’s Office of the Superintendent of Financial Institutions clarified earlier in September that tokenized deposits are not legally distinct from traditional deposits, and that the underlying technology does not change the product’s legal character. Banks are still required to consult their supervisors before rolling out novel offerings of this kind.
The initiative builds on earlier Canadian experiments with blockchain-based finance, including Project Samara, a Bank of Canada pilot conducted with RBC and TD that examined the use of blockchain for government-bond issuance and settlement. BMO has separately pursued tokenized cash and deposit work with other partners. In the United States, large banks are building their own tokenized-deposit networks, with institutions such as JPMorgan already offering deposit tokens to institutional clients — placing Canadian banks with significant U.S. operations at the crossing point of both efforts.
Potential Benefits and Open Questions
Supporters of the approach point to several possible advantages, including settlement that could occur around the clock rather than being confined to traditional batch-processing windows. Programmability could also let payments execute automatically once certain conditions are met, a feature that could be useful for trade finance, securities settlement or supply-chain transactions. Because the tokens would represent insured bank deposits rather than unregulated crypto assets, the model is designed to operate within the existing prudential and deposit-protection framework.
Many details of the plan remain undecided. The banks have not named a technology platform, set a commercial launch date, established a governance structure, or defined a formal role for Payments Canada, which operates the country’s core payment systems. Moving tokens between banks typically requires both a customer-facing transfer and a separate settlement step between institutions, which could rely on conventional real-time gross settlement systems or, eventually, tokenized central-bank money.
The project remains in an exploratory stage rather than representing a finished product. Its ultimate success will depend on factors such as technical interoperability between institutions, operational resilience, clear rules governing liquidity and settlement finality, and continued alignment with financial regulators as the work progresses.
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