Canada's Six Major Banks Collaborate to Develop Tokenized Canadian Dollar Deposits
Canada's six largest banks have announced a joint exploration of a digital currency solution for the Canadian dollar, initially focusing on tokenized deposits. The goal is to achieve faster, programmable, and near-24/7 payments within a regulated framework.
The participating institutions are the Royal Bank of Canada, Toronto-Dominion Bank, Scotiabank, Bank of Montreal, Canadian Imperial Bank of Commerce, and National Bank. The statement indicated that other deposit-taking institutions would be welcomed in due course. The first phase involves transferring tokenized Canadian dollar deposits among these six banks, with plans for long-term integration with external digital asset arrangements. The joint statement did not provide a commercial launch date or guarantee issuance.
Tokenized deposits are on-chain or distributed ledger representations of traditional bank deposits, remaining liabilities of the bank to customers rather than third-party stablecoins. The Canadian Financial Institution Supervisory Authority recently confirmed that tokenized deposits are legally equivalent to traditional deposits, assessing product nature rather than whether it is on-chain. The Canadian Stablecoin Act was approved in March 2026, outlining a framework for parallel tracks.
Cross-border comparisons are clear. JPMorgan has provided deposit tokens, JPM Coin, to institutional clients, while Citigroup and HSBC have their own standalone solutions; major U.S. banks are concurrently forming a shared tokenized deposit network, aiming for a launch next year. Previously, Canada’s central bank completed a wholesale central bank digital currency experiment, Project Samara, aimed at digital bond settlements. Some commentators suggest that this network may serve as an alternative or parallel to the ongoing Real-Time Rail payment track.
Standalone solutions are easier to implement, while interbank solutions require simultaneous completion of customer-side token transfers and interbank settlements, which can still utilize real-time gross settlement, wholesale central bank digital currency, or tokenized reserves. The six systemically important banks are collaborating because if one bank does not recognize the network, it becomes ineffective. Bank payment fees and interest on funds in transit are being squeezed from both sides by real-time clearing and stablecoins.
The market mechanism is a co-built defensive infrastructure. Buyers are enterprises and institutional clients needing 24/7 programmable settlements, while sellers are domestic major banks concerned about deposits being siphoned off by stablecoins and U.S. networks. The driving force comes from regulatory clarifications and networking with U.S. counterparts. The beneficiaries are the six banks that still keep liabilities on their balance sheets, while the pressured parties are issuers looking to bypass bank liabilities with stablecoins and the old clearing processes that rely on fees from funds in transit. The turnover of funds does not occur on the announcement date; it happens after interbank settlements transition from end-of-day batches to on-chain atomic settlements.
Source: Public Information
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The Canadian banking system is highly concentrated, with the six institutions forming a clearing club. In the past, a centralized payment association and real-time systems maintained a closed loop, but with the emergence of the stablecoin law and the U.S. deposit token network, the external exit of the closed loop has been opened. The six have chosen to develop a Canadian dollar token together, rather than issuing their own coins, shifting the competition from 'who issues first' to 'who is excluded from the programmable layer of the Canadian dollar.' Bank of Montreal and TD already have a presence in the U.S.; if they only focus on domestic tracks, cross-border clients may migrate liquidity to U.S. dollar deposit tokens.
The capital path is to keep liabilities within banks while changing the track to a ledger. Money has not left deposit insurance and prudent regulation; it simply adds combinable instructions to the same liability. This differs from stablecoins placing reserves with issuers or in government bond portfolios, and also from central bank retail digital currencies that centralize liabilities. Project Samara has proven that wholesale settlements can be recorded on the ledger, and the six banks are now supplementing the commercial bank currency layer, avoiding the definition of the programmable interface of the Canadian dollar by central banks or tech companies.
Similar actions include JPM Coin's standalone closed loop, the shared deposit token of U.S. regional bank alliances, and trials in Singapore and Hong Kong that layer bank liabilities with wholesale central bank currency. Canada is in a control phase: first locking in domestic mutual recognition, then discussing external interconnectivity. The industry is not inventing new currencies; it is competing for settlement clocks and programmable rights.
The structural change is a transfer of pricing power. Payment fees and interest on funds in transit rely on 'money overnight'; tokenization compresses overnight into contractual conditions. The mechanism is: regulatory recognition that on-chain deposits are still deposits allows banks to change tracks without losing their licenses; the simultaneous signing by the six prevents any one from using a private chain to turn the other five into passive counterparties. Whoever controls the atomic settlement rules of the Canadian dollar controls the default interface of corporate treasury systems.
ABAB News · Cognitive Law
Deposits on-chain, first preserving liability attribution, then changing the settlement clock
Innovations done together by the clearing club often aim to prevent outsiders from defining currency
Stablecoins are competing for overnight interest, while banks are reclaiming programmable rights