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