Canada's largest banks are moving further into blockchain-based money. Six of the country's biggest lenders are jointly exploring a tokenized deposit program designed to modernize how Canadian-dollar deposits move through the financial system, enabling centralized, programmable and fast digital payments. According to the banks' announcement, the project emphasizes security, stability and regulatory oversight, and could later be scaled up to connect bank-based digital money with other digital asset initiatives as Canada builds out its crypto framework.\n## Six Banks Join the Tokenized Deposit Project

The initiative includes Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group. The banks said the project will support the development of digital money with a focus on remaining secure, stable and regulated.

The effort is distinct from launching a new cryptocurrency: rather than minting a token, it involves tokenizing deposits held at regulated banks. In practice, each token would function as a digital representation of a balance held at a participating institution, meaning value moves over new digital rails while staying tied to the conventional deposit system. The first phase is expected to center on transferring these digital deposits seamlessly between the participating financial institutions. The banks also indicated they believe other deposit-taking institutions may eventually be interested in joining as well.

Tokenized Deposits vs. Stablecoins

From a crypto-market standpoint, tokenized deposits and stablecoins can resemble one another, but they are not identical assets. The Office of the Superintendent of Financial Institutions (OSFI) clarified on Sept. 10 that tokenized deposits are not legally distinct from traditional deposits simply because blockchain or other technology is used. The regulator takes a technology-neutral approach, meaning it does not judge the legal characteristics of a financial product based on the underlying technology.

That distinction matters as banks increasingly branch out into the digital asset space. A tokenized deposit remains linked to the underlying bank deposit, whereas a fiat-backed stablecoin is a new digital currency issued under its respective regulatory system.

Canada Expands Its Digital Asset Rules

The banking initiative comes as Canada develops a wider plan for its digital money infrastructure. The Stablecoin Act, part of Bill C-15, was proclaimed in March 2026, establishing a federal framework for issuing cryptocurrencies backed by a stable tie to fiat currency. Under that architecture, any non-financial institution issuing stablecoins will have to register with the Bank of Canada, maintain reserves with the central bank, and redeem stablecoins at par. The framework is being drafted and will be implemented by 2027.

The six-bank project therefore adds another layer to Canada's digital payment ecosystem, as the banks work to understand how tokenized deposits can be regulated while the regulator and other policymakers continue to develop rules for stablecoins and other digital payment technologies. With the stablecoin framework due to be implemented by 2027, milestones to watch include whether other deposit-taking institutions do eventually join the effort, and whether the project advances to the scale-up stage described in the announcement, under which bank-based digital money would link with other digital asset initiatives.

This article is based on reporting by CryptoNinjas.