Project Samara Research Paper

Authors
Bank of Canada: Rakesh Arora, Umar Faruqui, Scott Hendry, Dinesh Shah and André Usche;
TD: Mark Byrne, Caroline Cook, Kevin Fraites and Wally Forsyth;
RBC: Alex Caridia, Chris Meston, Teresa Venturino and Devon Read; and
EDC: Chadrick Buffel, Anne Boulanger, Sylvie Lacombe and Marsha Loraas.

Project Samara was a limited, real world experiment designed to evaluate the use of distributed ledger technology (DLT) and wholesale central bank digital money (W CAD) in Canadian capital markets. The project involved the issuance of a single tokenized bond by Export Development Canada to a closed investor group, with RBC Capital Markets and TD Securities acting as joint lead managers. Settlement was conducted in central bank money issued by the Bank of Canada through a purpose built DLT platform integrating a securities ledger and a cash ledger to support end to end market processes.

The experiment assessed whether DLT could improve efficiency, reduce settlement risk through atomic settlement, and enhance settlement finality and transaction speed. Project Samara showed that DLT based issuance and settlement of real financial instruments is technically feasible and can improve data integrity and reduce counterparty and settlement risk. These benefits were partly offset by increased system complexity, governance and liquidity costs, and new operational risks, as well as legal and regulatory frictions stemming from the need to reconcile decentralized ledger designs with existing centralized market roles. Given its narrow scope and experimental design, the findings are preliminary and illustrative, but they provide useful insights for future research and policy discussions on tokenization and DLT based financial market infrastructure.