Canada’s Office of the Superintendent of Financial Institutions said in a statement released on the 10th that tokenized deposits are not legally distinct from traditional deposits, clarifying how federally regulated financial institution laws apply to products built with new digital technology.

OSFI said its approach is technology-neutral, meaning the technology used to deliver a financial product or service does not determine its legal character. Instead, the agency said it focuses on what a product or service is, rather than how it is built or provided.

In that context, OSFI said tokenized deposits should not be treated as a separate legal category from traditional deposits. The clarification applies within the scope of federal financial institution laws, including the Bank Act, the Trust and Loan Companies Act, and the Insurance Companies Act.

The statement does not change the existing regulatory obligations of financial institutions. OSFI said institutions remain responsible for complying with relevant laws and regulations when developing new products or services, even when those offerings use newer forms of digital infrastructure.

OSFI also said federally regulated institutions must continue to follow its supervisory guidance and consult their supervising officer before launching new products. That means the announcement offers legal clarification, but not a blanket approval process for tokenized deposit issuance or distribution.

Why It Matters

The statement gives banks and other federally regulated institutions a clearer legal starting point for exploring tokenized forms of deposit money. That is significant because tokenized deposits sit at the intersection of traditional banking, on-chain payments, and institutional blockchain infrastructure, where legal classification can shape product design and launch decisions.

It also draws a cleaner line between tokenized deposits and other digital assets by framing them through existing banking law rather than as a novel standalone category. For the broader market, that could support more regulated experimentation in digital payment and settlement systems without changing the underlying compliance responsibilities of the institutions involved.