Canada's 'Big Six' banks to launch interbank tokenized deposit initiative

Six of Canada’s largest banks are exploring a Canadian-dollar tokenized deposit system designed to move money faster between financial institutions and eventually connect with other digital asset initiatives, TD Bank announced Tuesday.

Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group form the joint venture, whose first phase focuses on moving tokenized deposits across participating banks. The joint statement said more banks could join the project later.

“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,” they said.

The participating banks are collectively known as Canada’s Big Six: the dominant group in the country’s banking system, with operations spanning consumer banking, commercial lending, capital markets and wealth management.

The banks said the project aims to offer faster, more efficient and programmable payments to Canadian customers while preserving financial stability and regulatory oversight.

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 24/7 programmable payments while keeping customer funds within the regulated banking system.

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 also recently began testing tokenized deposits for 24/7 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, a test that issued, traded and settled 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.

The six-bank project does not yet commit the lenders to issuing a tokenized deposit. But it brings together most of Canada’s largest banks to explore a common model for digital money, rather than leaving Canadian-dollar activity on blockchain networks to stablecoin issuers alone.