Canada Gives Banks Green Light on Tokenized Deposits as OSFI Clarifies Their Legal Status - Bitcoin Foundation

Canada's banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), has clarified the legal treatment of tokenized deposits, giving the country's banks greater certainty about how these instruments fit within existing rules. The guidance effectively signals that banks can explore tokenized deposit issuance without the ambiguity that has held back similar efforts elsewhere.

Tokenized deposits are digital representations of commercial bank money recorded on a distributed ledger. Unlike stablecoins, which are typically issued by non-bank entities, tokenized deposits remain liabilities of the issuing bank and sit inside the regulated banking perimeter. That distinction matters for supervisors, who view them as an extension of familiar deposit-taking rather than a new category of money.

For markets, the development is notable because it could accelerate experimentation with on-chain settlement for payments and securities, areas where Canada has already piloted work through its Project Jasper and Project Samara initiatives. What to watch: whether major Canadian banks announce concrete tokenized deposit programmes, how OSFI treats reserve and reporting requirements in practice, and whether other jurisdictions respond with comparable clarity. The move does not by itself change the competitive landscape, but it reduces a key legal uncertainty.