Canada’s six largest banks have formed a joint initiative to test transfers of tokenized Canadian-dollar deposits between regulated financial institutions. Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank and Toronto-Dominion Bank Group are participating, while other banks may join as the project develops. The first phase will focus on moving tokenized deposits among participating institutions before any links are created to other digital-asset programs.
The project is built around money already held at commercial banks. A tokenized deposit would represent a Canadian-dollar bank balance and remain a liability of the institution that issued it. Digital ledger technology would provide the infrastructure for transferring or programming that deposit, while the underlying banking relationship would remain tied to the issuing institution. This structure separates the initiative from stablecoins and cryptocurrencies that are issued as distinct digital assets.
Big Six Banks Begin With Interbank Transfers
The participating banks plan to start by creating a common process for transferring tokenized deposits among themselves. That approach addresses one of the practical limits of systems operated by a single institution. If a bank issues a token that only functions inside its own platform, customers may still need to convert or settle funds through existing systems before moving value to another bank.
Canada’s Big Six are instead testing interoperability from the first stage. Their joint statement says the initial work will focus on efficient circulation between Canadian financial institutions. The longer-term plan could include connections with other digital-asset initiatives, although no timetable has been announced for commercial deployment, outside access or broader network integration.
Programmable Deposits Could Extend Payment Availability
Digitally representing conventional deposits could allow participating institutions to process certain transfers outside the operating windows used by traditional payment systems. Programmable instructions could also release funds automatically when agreed conditions are satisfied.
Tokenization changes the technical method used to transfer the deposit, but it does not remove the institution’s responsibility for customer funds, cybersecurity, transaction monitoring or internal governance.
A shared network therefore offers a potential way to combine digital settlement with existing banking responsibilities. Instead of creating isolated bank tokens, the project explores whether multiple institutions can use a common framework while preserving the legal status of conventional deposits.
Canadian Regulators Treat Tokenized Deposits as Bank Deposits
The initiative follows regulatory clarification issued earlier in September by Canada’s Office of the Superintendent of Financial Institutions. OSFI said tokenized deposits are not legally different from conventional deposits simply because blockchain or another digital system is used to represent them.
The regulator follows a technology-neutral approach, meaning it evaluates the financial product and its risks rather than focusing primarily on the technology used to deliver it. Banks introducing tokenized deposits must therefore continue meeting the legal, operational, cybersecurity and third-party risk requirements that already apply to their deposit businesses.
OSFI also expects federally regulated institutions to contact their lead supervisors before introducing novel financial products or services. Its guidance points banks toward the B-13 technology and cyber-risk guideline and the B-10 framework governing relationships with outside service providers.
Existing Banking Obligations Remain in Place
The regulatory position makes clear that tokenization does not create a separate category that allows banks to avoid existing obligations. A tokenized deposit remains a claim against the issuing institution, and that bank continues to carry the liability on its balance sheet.
This treatment gives the Big Six project a familiar financial foundation even though the transfer infrastructure may be new. They are testing whether deposits can be represented and moved differently while keeping their established legal and accounting character.
Tokenized Deposits Differ From Stablecoins
Tokenized deposits and stablecoins can both support digital payments and programmable transfers, but their financial structures differ. A tokenized deposit remains a bank liability, just as money held in a conventional account represents a claim against that bank.
Stablecoins are generally issued as separate tokens backed by cash, government securities or other reserve assets. Their redemption rights, legal treatment and regulatory requirements depend on the issuer and the rules governing the product.
Canada is developing a separate framework for fiat-backed stablecoins. The 2025 federal budget included measures for a regulatory system administered partly by the Bank of Canada, with C$10 million allocated over two years beginning in 2026.
The planned rules would amend the Retail Payment Activities Act to cover payment providers handling stablecoin transactions. Bank of Canada Governor Tiff Macklem previously said stablecoins should maintain a one-to-one link with central-bank currency, hold liquid government assets and provide users with clear information about redemption terms, timing and costs.
Canadian-Dollar Stablecoins Are Already Entering Regulated Channels
Canadian-dollar stablecoins are already appearing in institutional financial infrastructure. In May, Anchorage Digital added institutional custody for CADD, a Canadian-dollar token issued by Tetra Digital Group and backed one-to-one by Canadian dollars held at a licensed trust company.
The Big Six initiative follows a different route. Participating banks would tokenize deposits they already hold rather than issue a separate reserve-backed asset. Each institution would remain responsible for the underlying deposit and for the controls governing its transfer.
That distinction is central to the project. It allows banks to explore digital settlement while keeping the customer’s claim within the traditional commercial-bank deposit framework.
U.S. Banks Are Building a Similar Shared Network
Major American lenders are working on an interbank system with many of the same planned functions. In July, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo were reported to be developing a shared deposit network through The Clearing House.
The U.S. project is targeting the first half of 2027 and plans to offer multinational companies programmable treasury services, real-time liquidity management and cross-border transfers. More than a dozen other institutions, including TD Bank, BNY, HSBC, PNC, Truist and U.S. Bank, have supported the initiative.
JPMorgan and Citigroup already operate their own digital-payment systems, but a shared network could allow tokenized deposits to move directly between participating banks. JPMorgan’s Kinexys platform processes more than $7 billion in average daily volume and has handled over $40 trillion since launch.
Wells Fargo has separately announced a tokenized deposit service for corporate and commercial clients. Its initial plan covers selected U.S. dollar-to-British-pound transactions before adding more clients, countries and currencies during 2027.
Cross-Border Compatibility Remains a Future Possibility
For U.S. companies operating in Canada, compatible bank-led systems could eventually provide another route for moving funds between Canadian and American institutions. Neither project, however, has announced a direct connection.
The Canadian banks have not identified which outside networks they may support in the future.
Project Samara Provided an Earlier Tokenization Test
The new project follows the completion of Project Samara in March. The Bank of Canada, Export Development Canada, RBC Capital Markets, RBC Investor Services and TD Bank tested the issuance, trading and settlement of a C$100 million tokenized bond using distributed ledger technology.
Export Development Canada issued the bond with a maturity of less than three months to a closed group of investors. The experiment used wholesale central-bank deposits for payments and managed the security on a platform built with Hyperledger Fabric.
The system supported cash and bond issuance, bidding, coupon payments, redemption, secondary trading and settlement across connected cash and securities ledgers. According to the Bank of Canada, transactions could settle directly on the platform.
The Test Found Benefits and New Risks
Project Samara identified potential improvements in operational efficiency, data integrity and transaction workflows. It also reduced certain counterparty and settlement risks by allowing activities to occur directly on connected infrastructure.
At the same time, the Bank of Canada identified liquidity costs, governance requirements and integration challenges. The experiment also introduced technology, audit and fallback risks that would need to be managed in a larger deployment.
Those findings provide context for the Big Six initiative. Tokenized financial infrastructure can simplify some processes while creating new technical and governance demands. The latest project builds on earlier Canadian experimentation but shifts the focus from a tokenized bond to digital representations of ordinary bank deposits.
Canada Moves Toward Shared Bank-Led Digital Money Infrastructure
The Big Six project represents a coordinated attempt to test whether tokenized deposits can move efficiently between major Canadian banks while remaining inside the regulated banking system. Its first phase is deliberately focused on transfers among participating institutions before any connection is made to external digital-asset programs.
The initiative differs from stablecoin development because the digital units remain commercial-bank liabilities rather than separately issued reserve-backed tokens. That distinction keeps responsibility for the deposits with the banks and aligns the project with OSFI’s technology-neutral regulatory approach.
Canada’s recent work shows that tokenization is being explored across several parts of the financial system. Project Samara tested tokenized securities and settlement. Stablecoin regulation is being developed separately. The Big Six are now examining shared tokenized deposits as another possible component of digital financial infrastructure.
No commercial launch date has been announced, and the banks have not disclosed when outside institutions or other networks might gain access. The current initiative is therefore best understood as an interbank test of how existing Canadian-dollar deposits could become more programmable and transferable without changing their fundamental legal character.
If the first phase succeeds, the banks could later examine broader connections with other digital-asset systems. For now, the key development is that Canada’s largest lenders are testing a common model rather than building isolated tokenized-deposit products. That shared approach could determine whether bank-issued digital money can move more efficiently across institutions while preserving the regulatory, operational and balance-sheet structure of conventional deposits.
