Canada's six biggest lenders unveiled a joint initiative to explore Canadian dollar digital money, starting with tokenized deposits, with an eye to strengthening the nation's payments backbone. The participants are Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and National Bank of Canada. Requests for comment to CIBC and Bank of Montreal went unanswered, while the remaining banks said they had nothing to add beyond the news release.
Tokenized deposits are digital stand-ins for ordinary bank deposits that can be issued and moved over blockchain or similar tech. The appeal is speed and uptime - money could be transferred and settled almost instantly, 24 hours a day. Earlier this month, the federal bank regulator said such deposits are allowed under current law and are "not legally distinct from traditional deposits."
The consortium framed the move as keeping pace with the global shift toward digital money while keeping Canada's system both competitive and secure. It comes at a time when Prime Minister Mark Carney's Canadian government is seeking to stimulate the domestic economy and lessen dependence on the US as trade frictions intensify. Earlier this year in the US, a separate group of major banks said they would build a common system that links tokenized bank deposits, with the American subsidiaries of Bank of Montreal and Toronto-Dominion taking part, presenting it as a response to intensifying competition for deposits from stablecoins.
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If this effort eventually brings tokenized Canadian dollar deposits into everyday use, the headline change is speed - near real time movement and settlement at any hour. That would influence how quickly payments clear and how you manage cash flow. Keep an eye on updates from the banks and the regulator on where this goes next.
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