Canadian financial regulatory agency: Tokenized deposits have the same legal status as traditional deposits

The Office of the Superintendent of Financial Institutions (OSFI) in Canada stated on Thursday that tokenized deposits are legally indistinguishable from traditional deposits, and noted that the underlying technology used in financial products or services does not determine their legal nature.

OSFI indicated that financial institutions can conduct tokenized deposit business under existing financial regulatory laws without the need to establish additional regulatory provisions. Financial institutions and third parties acting on their behalf must ensure that their operations comply with applicable laws and regulations. OSFI requires financial institutions to communicate in advance with the OSFI supervisor responsible for regulation before launching new products or services, and recommends seeking legal advice prior to going live. The agency oversees nearly 350 financial institutions and 1,200 pension plans.