The Bank of Canada has completed a market experiment examining how tokenised bonds could move through financial systems using blockchain infrastructure.
The project involved several of the country’s largest financial institutions and centred on a short term security issued by Export Development Canada.
The test explored how distributed ledger technology could support the creation, trading, and settlement of bonds within a single digital environment.
Known as Project Samara, the initiative examined whether financial markets could handle the full lifecycle of a bond transaction on blockchain infrastructure.
The experiment also combined tokenised securities with digital settlement funds issued by the central bank, allowing both assets to move through the same ledger.
Officials used the controlled test environment to analyse whether blockchain platforms could replicate processes that traditionally occur across several financial market systems.
Project Samara trial
Project Samara brought together several large Canadian financial institutions.
The initiative involved RBC Dominion Securities, RBC Investor Services Trust, and TD Securities.
As part of the test, Export Development Canada issued a C$100 million security with a maturity of less than three months.
The bond was sold to a closed group of investors participating in the trial.
The goal was to simulate a real market issuance while testing whether distributed ledger technology could manage processes normally handled through several financial market intermediaries.
Tokenised bond lifecycle
The blockchain platform used in the project was operated by RBC.
The system supported the entire lifecycle of the bond transaction through a single digital ledger.
The security was issued directly in tokenised form, allowing participants to place bids and purchase the bond within the same infrastructure.
Once issued, the platform enabled the processing of coupon payments and the redemption of the bond when it matured.
Participants were also able to trade the bond on secondary markets through the same system.
This allowed the trial to test how trading, settlement, and asset servicing functions could operate within one distributed ledger network.
Digital settlement system
The experiment also tested how payments could move through the blockchain platform.
For settlement, the Bank of Canada created tokenised versions of wholesale Canadian dollars.
These digital funds moved on the same ledger as the bonds.
This allowed trades to settle directly within the platform rather than relying on separate payment systems.
By keeping both securities and settlement assets within one environment, the project examined whether transactions could be processed and completed through a single blockchain infrastructure.
Regulatory moves
The experiment comes as Canadian authorities continue developing regulatory frameworks for digital assets.
In its November budget, the federal government signalled plans to introduce legislation governing Canadian dollar-backed stablecoins.
Oversight is expected to involve the Bank of Canada and would focus on areas such as reserve backing, redemption rules, and risk management requirements.
Canada has also taken steps to strengthen oversight of digital asset infrastructure.
Last month, the Canadian Investment Regulatory Organization introduced a digital asset custody framework aimed at improving how crypto assets are held by trading platforms.
The framework is designed to strengthen custody standards and reduce risks such as hacking, fraud, and insolvency following failures in parts of the digital asset sector.