The banking regulator for Canada stated that a tokenized deposit should be treated the same as any other deposit accepted by federally regulated financial institutions․
The Office of the Superintendent of Financial Institutions has said that its technology-neutral approach focuses on the nature of the product‚ not on the infrastructure used to create or deliver it․
Because of this principle of non-separability‚ tokenization of a deposit on a blockchain or other network does not create or modify a separate, distinct financial instrument․ OSFI said that tokenized deposits are not legally distinct from underlying deposits and that banks are subject to the existing federal regulatory framework for the underlying banking activity․
Institutions are ultimately responsible for meeting any compliance and legal obligations even when using third-party technology service providers․
The regulator also encouraged institutions to refer to its B-13 guideline on technology and cyber risk management and B-10 guideline on third-party risk management․ Banks considering a new product or service should contact their OSFI lead supervisors before launching them․
This distinction is important because financial institutions are trialing payments and settlements using blockchain․ A tokenized deposit is commercial bank money stored on a digital ledger․ It is a liability of the bank issuing it․ By contrast‚ stablecoins are classified differently depending on the issuer‚ means of backing‚ and the jurisdiction․
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By 2026‚ international banks had begun testing tokenized deposits‚ while Swift had assembled a group of seventeen banks from six continents to trial a blockchain-based ledger for 24/7 cross-border payments․
Other participants included HSBC‚ Citi‚ BNP Paribas‚ UBS‚ Standard Chartered‚ ANZ and DBS․ In August‚ HSBC and Standard Chartered linked their respective tokenized deposit platforms in conjunction with Swift’s shared infrastructure to successfully conduct a live transaction․
Other projects have explored other models; Custodia Bank and Vantage Bank built a system that allows a token to be used as a bank deposit within the two banks’ Hazel network and as a stablecoin outside the network․
LayerZero and Keeta also announced infrastructure to move tokenized commercial bank deposits across various blockchain networks and currencies․
Canada is preparing its own regulatory framework for fiat-backed stablecoins․ The 2025 Canadian federal budget included a proposed stablecoin regulatory framework․ Bank of Canada Governor Tiff Macklem has argued that stablecoins should be backed on a one-to-one basis with central bank currency and liquid government assets․
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OSFI’s decision‚ therefore‚ means that tokenized bank deposits stay within the existing regime‚ rather than being granted a new‚ distinct definition just because they happen to be based on distributed ledger technology․
For Canadian banks‚ the implication is clear: when it comes to deposits‚ technology can change how they look and move‚ but not what rights and obligations attach to them․
