VersaBank, a federally licensed Canadian digital bank focused on institutional lending, is adding foreign exchange functionality to its tokenized deposit platform, allowing users to exchange US and Canadian dollars on a blockchain-based system.
The update announced Tuesday enables real-time currency conversions 24/7 using Real Bank Tokenized Deposits (RBTD), which are digital representations of fiat deposits issued and backed by an Ontario-based institution.
This feature aims to streamline cross-border transactions by reducing reliance on established currency rails, which are often slower and restricted by bank opening hours.
The update is a step towards commercialization rather than a full product launch. VersaBank has been piloting its tokenized deposit system since last year, and the addition of US and Canadian dollar conversions expands its functionality for cross-border payments, especially between the two countries.
RBTDs are tokenized versions of bank deposits that can be transferred on blockchain infrastructure while remaining liabilities of the issuing bank and secured 1:1 by customer deposits, According to to the American Bankers Association. Unlike stablecoins, which are typically issued by non-banks, they operate within the established banking system.
Related: Columbia Business professor casts doubt on tokenized bank deposits
Financial institutions are exploring tokenized deposits
Banks are increasingly exploring tokenized deposits as a way to combine the speed and programmability of blockchain with the security of established deposits, particularly in utilize cases such as cross-border payments and financial settlements, because scratched by KPMG.
A notable example is BNY’s launch of tokenized depositories for institutional clients, which aim to support collateral and margin requirements. BNY said the move comes as institutions look for “faster and more efficient ways to transfer assets.”
Globally, Singapore’s Project Guardian is exploring the tokenization of assets in financial markets, including pilot programs involving tokenized deposits and other digital assets.
The push comes as tokenization becomes one of blockchain’s fastest-growing utilize cases. Industry data shows more than $27 billion in tokenized assets spanning products ranging from private loans to U.S. Treasuries and stocks.
Related: Crypto Investment Guide 2026: Bitcoin, Stablecoin Infrastructure, Tokenized Assets
