Canada's six largest banks to launch interbank token digital deposit scheme

Six of Canada's largest banks jointly explore token digital deposits to be made available 24 hours a day under the regulatory framework closed beta

Several major Canadian banks are working together on a common technology model for token digital deposits, with the goal of enabling traditional banks to test around-the-clock payment services powered by blockchain without breaking away from regulatory regimes. The move reflects an accelerated shift in global banking activity towards deposit operations over distributed ledgers and Canada's desire to work collaboratively to avoid its digital currency space being dominated solely by issuers of stablecoin .

Substantial differences between token and stablecoin

The so-called token digital deposit refers to the presentation of customers' funds stored in a bank in digital form, rather than being issued separately by crypto companies. If more than one bank shares the same system, customer funds can always remain within the regulated banking system, while banks can also experiment with 7×24 hours uninterrupted payment functionality. For regulators and banks, this model provides a more stable balance between innovation and compliance.

Global banking rivals with deposit chains

Canada's move is not an isolated incident. In the United States, regional banks are co-creating a shared token digital deposit network; JPMorgan Chase, Citigroup and Wells Fargo have each launched products for institutional customers. Additionally, the Global Banking Financial Telecommunications Association (Swift) has recently started testing token , joining banks on six continents to explore 24/7 cross-border payments.

Previously, there were token securitized bonds and digital currency practices.

This exploration also complements the payment scenarios of Canada's existing token digital financial market trial. In March this year, RBC and TD completed Project Samara, a test using token , wholesale fiat currencies to issue, transact and settle bonds worth $100 million (approximately $71 million) on a distributed ledger. At the same time, the Canadian domestic stablecoin market is taking shape: in May, Shopify supported with National Bank of Canada the launch of a regulated digital fiat currency that can operate around the clock.

Shared model rather than issuance commitment

It should be noted that this project involving six banks has not yet committed to officially issuing token digital deposits. However, it brings together the vast majority of Canada's leading banks at one table and co-designs a common framework for digital currency , rather than leaving the activity of Canadian dollars on the blockchain network entirely in the hands of stablecoin issuers.