Canada’s 6 Banking Giants Join Forces: They’re Not Planning to Issue a Stablecoin!
Canada’s six largest banks have launched a joint initiative to explore moving deposits between banks using digital tokens instead of issuing a separate stablecoin.
The project announced by TD Bank on Tuesday includes Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group. These six institutions, which make up the dominant group in Canada’s banking system, will work on a common model for tokenized deposits denominated in Canadian dollars. Other banks may join the initiative in the future.
Bank deposits, not a stablecoin, will be transferred
The first phase of the project focuses on efficiently transferring tokenized deposits between participating financial institutions. In this model, the digital token represents a deposit held at a bank; it is not the same product as a stablecoin separately issued by a crypto company. The goal is to keep customer funds within the regulated banking system.
The common infrastructure being explored by the banks could enable the testing of payments that can operate around the clock and be programmed according to specified conditions. In the long term, the structure is intended to connect with other digital asset initiatives.
However, 24/7 payment services have not yet been made available. At this stage, the six banks have also made no commitment to issue tokenized deposits; the development announced is the establishment of a joint research initiative.
A different step from the earlier bond pilot
In March, the Bank of Canada, RBC and TD tested the issuance, trading and settlement of a 100 million Canadian dollar bond on a distributed ledger as part of Project Samara. The new initiative brings the six major commercial banks together under the same model for deposit transfers and payments.
For this reason, the focus of the work is not so much on issuing a new investment token as on exploring how money held at banks can be moved through digital asset infrastructures. The banks aim to provide faster and more efficient payments while preserving regulatory oversight and financial stability.