Canada regulator says tokenized deposits are legally the same as traditional bank deposits

Canada’s Office of the Superintendent of Financial Institutions (OSFI) announced that tokenized deposits are legally identical to traditional bank deposits. The regulator emphasized that the legal nature of a deposit depends on the underlying financial claim, not on the technology used to issue or deliver it.

Regulatory stance

OSFI stated that federally regulated financial institutions remain responsible for meeting existing legal, technology, cyber and third‑party risk requirements when offering tokenized deposit products. Banks must consult their OSFI lead supervisors before launching novel products and are encouraged to seek legal advice where appropriate.

Technology‑neutral approach

The regulator’s guidance follows a technology‑neutral framework, focusing on what a product is rather than how it is built. OSFI referenced its B‑13 guideline on technology and cyber risk management and the B‑10 guideline on third‑party risk management as applicable to tokenized deposits.

Industry context

Globally, banks are testing tokenized deposits for payments and settlement on blockchain infrastructure. Notable projects include Swift’s shared ledger for cross‑border tokenized deposit payments and various bank‑led initiatives that integrate tokenized deposits with existing core banking systems.

Examples of tokenized deposit projects

• Swift’s blockchain ledger connecting HSBC and Standard Chartered for live tokenized deposit transactions.
• Custodia Bank and Vantage Bank’s dual‑purpose token that functions as a bank deposit within the Hazel network and as a stablecoin when transferred outside.
• LayerZero and Keeta’s system enabling tokenized commercial bank deposits to move across public blockchains such as Ethereum, Solana, Base and the Keeta Network.

Relation to stablecoins

OSFI’s clarification applies specifically to deposits issued by federally regulated institutions. Stablecoins, while using similar blockchain infrastructure, are treated differently based on the issuer and the governing framework. Canada is developing a separate regulatory regime for fiat‑backed stablecoins, with legislative amendments expected to cover payment service providers handling stablecoin transactions.