Canadian banks explore digital payment infrastructure

By Divya Shah

Six of Canada’s largest banks have joined forces to explore Canadian dollar-denominated digital money solutions, beginning with a tokenised deposits initiative aimed at modernising the country’s payments infrastructure. 

The collaboration seeks to ensure Canada’s financial system remains competitive, secure and prepared for the evolving digital money landscape. The initiative will initially focus on developing tokenised deposit solutions that can support faster, more efficient and programmable payments while maintaining regulatory oversight and financial stability. 

Participating institutions include Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada (NBC), Royal Bank of Canada (RBC), Scotiabank and TD Bank Group. 

As part of the first phase, the banks will explore ways to move tokenised deposits efficiently between Canadian financial institutions. Over the longer term, the initiative could connect with other emerging digital asset and digital money projects. 

The participants said the project is intended to promote responsible innovation and broaden participation in Canada’s evolving digital money ecosystem. By leveraging tokenised deposits, the banks aim to improve payment speed and efficiency for businesses and consumers while preserving the safeguards of the existing banking system. 

The group also indicated that additional deposit-taking institutions could join the initiative as the project develops. 

The move comes as financial institutions globally explore digital forms of money, including tokenised deposits, stablecoins and central bank digital currencies (CBDCs), to enhance payment efficiency and support new digital asset use cases. 

Tokenised deposits are digital representations of commercial bank deposits issued on distributed ledger infrastructure, allowing funds to move more efficiently while remaining within the regulated banking framework. 

The initiative signals growing interest among Canadian banks in creating interoperable digital payment infrastructure that can support future innovations in financial services and digital assets.