The Office of the Superintendent of Financial Institutions (OSFI) in Canada stated that federal financial institutions may offer tokenized deposits, provided they comply with existing laws and consult with regulators in advance; the underlying technology does not determine the legal nature, and tokenized deposits are legally indistinguishable from traditional deposits.

The statement adopts a technology-neutral stance, focusing on what the product "is" rather than "how it is built or delivered." Financial institutions and their third-party innovations must comply with existing laws and regulations, including guidelines such as B-13 on technology and network risk management, and B-10 on third-party risk management. Before launching any novel products or services, they must communicate with the relevant primary regulator and are encouraged to seek legal advice. This statement pertains to licensed businesses under federal financial institution legislation, providing clarity on the feasibility of digital deposits while not establishing a separate token law. The proposed stablecoin legislation excludes "deposits or deposit certificates" and assets under public deposit insurance from the definition of stablecoins, aligning with the approach of keeping tokenized deposits within the bank liability framework.

Buyers aim to keep deposits on the balance sheet while obtaining a transferable on-chain form from federally licensed institutions, while sellers are non-bank issuers creating independent stablecoins with similar payment functions. The funds remain bank liabilities; only the registration and clearing form changes. Beneficiaries are banks that can conduct digital deposits within existing prudential rules, deposit insurance, and capital frameworks; those under pressure are issuers attempting to make payment stablecoins a substitute for bank deposits—legal identity remains tied to "deposits," and licensing, freezing, and repayment obligations do not disappear simply because they are on-chain.

Source: Public Information