The initiative involves Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group, according to a joint announcement. The banks are jointly exploring tokenized deposits—digital representations of traditional bank deposits that can be transferred on a blockchain or similar distributed ledger technology—specifically for interbank payments.
The move comes shortly after Canadian regulators provided clarity on the classification and treatment of tokenized deposits, which appears to have paved the way for the country's largest financial institutions to collaborate on the technology. The announcement did not specify a timeline for implementation or whether a live pilot is planned.
Tokenized deposits differ from central bank digital currencies (CBDCs) in that they are issued by commercial banks and represent claims on the issuing bank, rather than a direct liability of the central bank. Proponents argue they could enable faster, programmable payments while preserving the existing two-tier banking system.
The joint exploration marks one of the most significant coordinated efforts by major commercial banks to adopt blockchain-based deposit technology, signaling growing institutional interest in modernizing payment infrastructure.