Canada's 'Big Six' banks to launch interbank tokenized deposit initiative
Initial testing will focus on moving digital commercial deposits across participating institutions before linking to broader digital asset ecosystems.
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.
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.