Canada's Six Biggest Banks Build a Shared Tokenized Deposit Network

On Tuesday, six of Canada's biggest banks (RBC, TD, BMO, Scotiabank, CIBC and National Bank) announced a joint project for a shared Canadian-dollar tokenized deposit network.

The first phase is limited to transfers between the banks themselves, not consumer wallets. A prior public consultation from the Bank of Canada on a digital dollar found the opposite mood: 85% of nearly 90,000 respondents said they would not use such a currency.

What the banks are actually planning

A tokenized deposit is a simple thing: a regular bank deposit represented as a digital token on a shared ledger. Same amount, same bank, same rules. Only the network moving the data changes. It is not a new cryptocurrency and not a central bank digital currency.

In a joint statement, the banks said they want the system to be "competitive and secure" while keeping the safeguards that already govern ordinary bank money. They also want the door open for other Canadian deposit-taking institutions to join later.

Why an interbank network is needed right now

Moving money between banks in Canada today clears slowly outside a basic e-transfer. A shared token network would, in theory, let banks settle instantly and around the clock, with payments programmed to trigger automatically. Funds could release the moment a shipment clears customs, for example.

Regular bank customers likely won't notice any of this. The system will run in the background, the same way nobody thinks about the wiring behind an ordinary bank transfer today.

Why rival banks are cooperating

RBC, TD, BMO, Scotiabank, CIBC and National Bank are direct competitors for customers in everyday banking. Payment infrastructure works on a different logic: shared rails cost each individual bank less than building its own network, and they lower the risk that some outside player, like a stablecoin issuer, siphons off a slice of deposits instead.

A similar split between product competition and infrastructure cooperation already runs the card payments market, where Visa and Mastercard serve rival banks on the same rails. Tokenized deposits copy that model for real-time settlement.

Canada has tried digital money before

This project is separate from the official digital-dollar debate. In 2023, the Bank of Canada ran a public consultation on a possible digital dollar and drew almost 90,000 responses. Eighty-five percent of respondents said they would not use such a currency, and many named privacy and continued access to cash as priorities.

Digital money attempts in Canada already have a history of failure. The Royal Canadian Mint sold off its MintChip digital-cash pilot in 2016, and the app built on it shut down for good in 2018.

The six-bank project differs from those failed CBDC attempts in one key way: it doesn't touch ordinary people's wallets directly, at least in this first phase. That sidesteps the main worry from the 2023 consultation. Payment privacy and the central bank's grip on cash stay untouched, since the money remains ordinary bank deposits.

Canada isn't alone in this race

In the US, JPMorgan, Citi, Bank of America and Wells Fargo are building a rival tokenized deposit network through The Clearing House, the bank-owned real-time payments operator, targeting a launch in the first half of 2027, largely to keep stablecoins from siphoning off deposits.

In parallel, 39 US state banking associations built their own version, called the BankChain Alliance, aimed at community and regional lenders.

Notably, Scotiabank and TD are also among 21 banks backing a separate joint US dollar stablecoin targeting the same first-half 2027 window. The same institutions are betting on tokenized deposits and stablecoins at the same time.

BMO went further still, becoming the first bank this year to go live on CME Group's tokenized cash platform on Google Cloud, letting institutional clients move dollars around the clock for margin and collateral.

What comes next

Unlike leading stablecoins such as USDT or USDC, the new bank networks target the banks themselves and their institutional clients rather than retail crypto users. It's an infrastructure project more than a product for an ordinary wallet.

The six Canadian banks haven't set a launch date. The first phase stays limited to transfers between participants, and opening the system to other deposit-taking institutions remains just a stated goal for now.

For ordinary people, the effect may show up indirectly, through cheaper and faster international transfers or trade settlements, where banks today build in several days of delay. That's a question of years, not the next few months.