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CIRO’s InnovateSafe test involving tokenized bond offering
Executive Summary
The Canadian Investment Regulatory Organization (CIRO) has approved an application under InnovateSafe, CIRO’s regulatory sandbox, to facilitate an experimental research project in testing the application of distributed ledger technology to support the issuance, distribution, lifecycle management, and trading of tokenized bonds.
Nature of the Proposal
The approved participants will test a blockchain-based platform for the issuance, lifecycle management, and secondary proprietary trading of tokenized bonds, settled using digital Canadian currency issued by the Bank of Canada.
Participants
Participation is limited to two CIRO-regulated Dealer Members that meet specified eligibility, systems, and risk-management requirements.
- RBC Dominion Securities Inc.
- TD Securities Inc.
Purpose of the Test
The InnovateSafe test is intended to assess whether the use of a blockchain-based platform will bring potential benefits to investors and capital markets, which includes more efficient transaction processing, enhanced transparency and auditability, reduced settlement risk, and insight infrastructure modernization opportunities across the debt markets.
Scope of the Test
The test applies only to issuance, lifecycle processing, and proprietary secondary trading of tokenized bonds issued by Export Development Canada, and settlement using a digital representation of wholesale Canadian dollars created and managed by the Bank of Canada within a closed-loop, permissioned blockchain environment, denominated in Canadian dollars and exchangeable into money in the Lynx payment system.
The test will not involve external clients.
Duration and Termination
The InnovateSafe test will operate for a period of two years.
Participation may be modified, suspended, or terminated at any time. Absent explicit CIRO confirmation, the test will expire automatically at the end of the evaluation period.
Undertakings
All participants are subject to specific undertakings, including eligibility requirements, reporting obligations, and wind-down provisions.
The full undertakings are available here.
Disclaimer
Participation in InnovateSafe does not constitute CIRO endorsement, approval, or authorization of any product, issuer, or business model, and does not represent a formal regulatory position or policy determination.
Contact
Questions regarding InnovateSafe may be directed to [email protected].
Other Notices associated with this Enforcement Proceeding:
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