Canadian Financial Authority Treats Tokenized Deposits as Equivalent to Traditional Deposits

The Office of the Superintendent of Financial Institutions (OSFI) in Canada has announced that tokenized deposits are legally indistinguishable from traditional deposits. In a statement released on the 10th, OSFI emphasized its 'technology-neutral' stance, stating that the technology used in financial products or services does not determine their legal nature. OSFI highlighted that it focuses on what financial products or services are, rather than how they are constructed or provided, asserting that 'tokenized deposits are not legally distinct from traditional deposits.' This announcement aims to clarify the legal scope for new financial products and services in light of advancements in digital financial technology. OSFI's technology-neutral principle applies to federal financial institution-related laws, including the Bank Act, Trust and Loan Companies Act, and Insurance Companies Act. However, the existing regulatory obligations of financial institutions remain unchanged, even with the adoption of new technologies. OSFI stated that financial institutions are responsible for complying with relevant laws and regulations when developing new products or services. Additionally, financial institutions must adhere to OSFI's regulatory guidelines and are required to consult with their supervising officer prior to launching new products.

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