Statement on Tokenized and Other Digitally Represented Deposits

OSFI supports innovation and competition within a strong and resilient Canadian financial system.

Advances in digital financial technology are enabling financial institutions (FIs) and their third parties to develop innovative financial products and services, for example, tokenized and other digitally represented deposits. This is a specific use case where additional clarity from OSFI on legal permissibility could be beneficial to FIs.

This statement clarifies OSFI’s technology-neutral stance regarding FIs’ permitted business and activities under federal FI legislation.^{Footnote 1} The underlying technology of a financial product or service does not determine its legal nature. To be clear, we focus on what the product or service is, not how it is built or delivered. Tokenized deposits are, for example, not legally distinct from traditional deposits.

In building or delivering products and services, FIs are responsible for ensuring that innovative activities, including those performed by third parties on an FI’s behalf, comply with applicable laws and regulations. In all cases, OSFI expects FIs to comply with applicable guidance such as B-13 – Technology and Cyber Risk Management and B-10 – Third-Party Risk Management, among others.

FIs are expected to engage with their OSFI lead supervisors in advance of launching any novel products or services. FIs are also encouraged to seek legal advice as appropriate.