The Bank of Canada said it conducted an experiment testing how tokenized bonds can circulate in financial markets in collaboration with a group of the country’s largest lenders.
Export Development Canada issued a C$100 million ($73 million) security with a maturity of less than three months, which was sold to a closed group of investors.
The test, known as Project Samara, also involved RBC Dominion Securities, RBC Investor Services Trust and the TD Securities division of the Toronto-Dominion Bank. The group tested how bonds issued by EDC can be created, traded and settled using distributed ledger technology.
The platform, operated by RBC, supported the full lifecycle of a bond transaction. The bond was issued in token form on the ledger, allowing participants to submit bids, process coupon payments, repurchase bonds and trade in secondary markets through the same system.
The experiment also tested digital settlement using tokenized versions of wholesale Canadian dollars created and managed by the Bank of Canada. These digital funds operated on the same register as bonds, thus allowing the settlement of transactions within the platform.
In its November budget, the federal government announced plans to introduce legislation governing Canadian dollar-backed stablecoins, with oversight expected to involve the Bank of Canada and rules focused on reserve support, repurchase policies and risk management.
Last month, the country’s investment regulator CIRO introduced a digital asset custody framework aimed at strengthening the way crypto assets are held by trading platforms, tightening standards to reduce risks such as hacking, fraud and insolvency following past failures of the sector.
