Canada’s Big Six banks to test tokenized deposit system for faster payments

Canada’s six largest banks just collectively decided that moving money between each other could use an upgrade. On September 22, Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group announced a joint initiative to build a Canadian-dollar tokenized deposit system designed to make interbank transfers faster and, eventually, programmable. The first phase focuses on something deceptively simple: moving tokenized deposits efficiently between the six institutions. The longer-term ambition is broader, targeting interoperability with digital asset initiatives and the kind of programmable payment infrastructure that could reshape how Canadian businesses and consumers interact with their banks. What tokenized deposits actually mean Think of a tokenized deposit as your regular bank deposit, except represented as a digital token on a distributed ledger rather than as an entry in a legacy database. The money is still a bank liability, still insured, still regulated. The wrapper is just different, and that wrapper enables things traditional rails struggle with, like near-instant settlement, conditional payments that execute automatically when certa...