OSFI Confirms Tokenized Deposits Are Legally Equivalent to Traditional Deposits Canada's federal banking regulator has taken a significant step toward mainstreaming blockchain-based finance.
Canada's federal banking regulator has taken a significant step toward mainstreaming blockchain-based finance. The Office of the Superintendent of Financial Institutions (OSFI) published a statement on September 10, formally clarifying that tokenized and other digitally represented deposits are not legally distinct from traditional deposits, adopting what it described as a "technology-neutral stance" toward the permitted activities of federally regulated financial institutions.
The clarification means banks do not create a separate legal category simply by representing deposits digitally or recording them on a blockchain. A tokenized deposit remains a deposit offered by the financial institution, with the bank retaining responsibility for the underlying obligation. The use of distributed ledger technology changes how the asset can be represented or transferred, but not its legal character under the existing framework.
By treating tokenized deposits as functionally equivalent to conventional deposits, OSFI has signaled that federally regulated financial institutions can proceed with blockchain-based deposit products without needing a separate legal classification or bespoke regulatory regime. This effectively opens the door for major Canadian lenders to modernize their clearing and settlement infrastructure using blockchain networks.
The move positions Canada among the first major jurisdictions to explicitly address the legal treatment of tokenized deposits, a category distinct from stablecoins in that tokenized deposits represent claims on a regulated bank rather than on a private issuer.
Banks must still follow existing compliance, cyber-risk and third-party guidelines, including OSFI's B-13 and B-10 frameworks, when launching tokenized products. Institutions are also expected to consult with their OSFI lead supervisors before bringing any new product to market.
The development comes as international peers are already moving in a similar direction. In July, Swift launched a blockchain ledger with 17 banks across six continents preparing to test tokenized deposit payments for round-the-clock cross-border settlements, with participating institutions including HSBC, Citi, BNP Paribas, UBS, Standard Chartered, ANZ and DBS.
OSFI's statement does not establish Canada's broader stablecoin rules. The country is developing a separate framework for fiat-backed stablecoins, with Canada's 2025 federal budget including provisions for a new stablecoin regime and the Bank of Canada expected to receive C$10 million over two years beginning in 2026 to administer the framework.
Sources:crypto.news: Canada's OSFI says tokenized deposits are legally the same as bank depositsCrypto Times: Canada's OSFI Gives Banks Clarity on Tokenized DepositsBitcoin Foundation: Canada Gives Banks Green Light on Tokenized Deposits
