As digital money evolves from concept to practical application, experimentation becomes essential. As part of the broader exploration of the future of money, the Interac Innovation Team has adopted a deliberate, test-and-learn approach—combining internal expertise with targeted collaboration to better understand how emerging capabilities could apply to real payment challenges.
One such collaboration brought Interac and Knova together as trusted partners to rapidly move from concept to working prototype in a controlled environment. By combining Interac’s deep expertise in payments infrastructure with Knova’s digital asset operating platform, the teams were able to move efficiently from concept to practical implementation while maintaining clear ownership of strategy and outcomes.
Hypothesis: Evaluating digital money interoperability
At the centre of this work was a focused question:
How could different forms of digital money, such as tokenised deposits issued by financial institutions and a similuated Interac Canadian-dollar stablecoin (iCAD), interact seamlessly across a shared ecosystem?
This reflects a critical challenge as digital assets evolve. While new forms of digital money are emerging, they are often developed in isolation—creating a risk of fragmented systems that do not easily connect or scale.
To explore this, Interac and Knova focused on a consumer-oriented scenario, simulating how individuals could hold and use different forms of digital money in a unified experience. This included the issuance of iCAD as a stablecoin representation of Canadian dollars, alongside bank specific tokenised deposits issued by simulated financial institutions, and the ability to move value across wallets, issuers, and platforms.
The goal was not to evaluate any single form of digital money in isolation, but to test whether they could interoperate seamlessly enough to support the expectations of everyday payment experiences.
Testing: Simulating real-world transactions
To support this, a controlled test environment was developed simulating real transaction flows, wallet interactions, and settlement behaviour across participants. The environment provided a practical way to prove how value could move across different forms of digital money, and where coordination challenges might emerge.
Interac led use-case definition, ecosystem architecture, and overall solution design to ensure alignment with Canada’s payments infrastructure and long-term strategic objectives. Knova contributed its enterprise digital asset operating platform, enabling rapid implementation of interoperable transaction workflows, wallet operations, and asset orchestration through platform configuration rather than custom development. Close collaboration and iterative development cycles helped the teams evaluate cross-issuer settlement and multi-wallet interoperability concepts quickly while remaining grounded in practical operational requirements.
Outcomes: Importance of interoperability in Canada
Several important insights emerged from the collaboration. Most notably, interoperability proved to be the critical requirement for scaling digital money. Rather than evaluating stablecoins or tokenised deposits independently, the project demonstrated the potential for how multiple forms of digital money can operate together within a shared ecosystem while remaining connected to existing payment infrastructure. In one prototype scenario, iCAD was transferred between a consumer and a merchant, each banking with different financial institutions, completing the transaction in seconds as a single, seamless event despite each institution maintaining its own underlying technology stack.
The work also highlighted the value of shared, real-time visibility across participants. By providing both the sending and receiving financial institutions with a shared, real-time view of the transaction state without requiring them to adopt the same blockchain or ledger technology—the prototype illustrated how institutions can improve coordination, transparency, and operational efficiency while preserving their own infrastructure choices. These findings reinforce that the future of digital money is likely to be one of coexistence rather than replacement, where stablecoins, tokenised deposits, and traditional payment systems work together within trusted national infrastructure.
One of the clearest outcomes from this work is the growing importance of a domestic interoperability layer for Canada. As new forms of digital money continue to emerge, a trusted national network will be essential for connecting participants in a secure, governable, and scalable way. Interac is uniquely positioned to serve as this connective infrastructure—enabling seamless movement of value across issuers, wallets, financial institutions, and payment providers while maintaining the trust, oversight, and resilience expected of Canada’s payments ecosystem.
Beyond this prototype, the work establishes a foundation for future innovation. The capabilities explored—including programmable payments, 24/7 settlement, real-time operational visibility, and more efficient coordination between financial institutions—improve how money moves across the Canadian ecosystem while allowing new forms of digital money to complement, rather than replace, existing payment rails.
Moving Forward
As the ecosystem continues to evolve, the focus remains consistent: start with real problems, test in controlled environments, and ensure that innovation strengthens—not fragments—the Canadian payments system.
