Canada’s six largest banks explore tokenized Canadian dollar deposits

Canada’s six largest banks are jointly exploring a system for tokenized Canadian dollar deposits that would allow digital representations of bank deposits to move between financial institutions.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 from the banks on Tuesday. The first phase will focus on moving tokenized deposits between Canadian financial institutions before potentially connecting with other digital asset systems.The project comes less than two weeks after Canada’s banking regulator provided additional clarity on the legal permissibility of tokenized deposits for financial institutions.On Sept. 10, the Office of the Superintendent of Financial Institutions (OSFI) said tokenized deposits are “not legally distinct from traditional deposits,” adding that the underlying technology of a financial product does not determine its legal nature.OSFI clarifies tokenized deposit rules. Source: Office of the Superintendent of Financial Institutions (OSFI)Tokenized deposits represent money held at a regulated bank and remain a liability of that bank, unlike fiat-backed stable...