The Bank of Canada said it completed an experiment testing how tokenized bonds can move through financial markets in conjunction with a group of the country's largest lenders.

The government's 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 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 tokenized form on the ledger, allowing participants to submit bids, process coupon payments, redeem bonds and trade on 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 moved on the same ledger as the bonds, allowing transactions to settle within the platform.

In its November budget, the federal government signaled plans to introduce legislation governing Canadian-dollar-backed stablecoins, with oversight expected to involve the Bank of Canada and rules focused on reserve backing, redemption policies and risk management.

Last month, the country's investment regulator, CIRO, introduced a digital asset custody framework aimed at strengthening how crypto assets are held by trading platforms, tightening standards to reduce risks such as hacking, fraud and insolvency following past industry failures.