Monument Bank, a London-based challenger institution, plans to tokenize up to £250 million ($335 million) of retail customer deposits on the Midnight network. The bank described this transaction as the first such move by a UK-regulated bank on a public blockchain. The announcement occurred on March 25, signaling a significant shift toward integrating traditional banking products with distributed ledger technology.
The tokenized deposits will remain interest-bearing and fully backed by Monument Bank assets. Customers can redeem these tokens one-for-one in pounds sterling without loss of principal. Crucially, the funds will continue to be covered by the UK’s Financial Services Compensation Scheme.
Midnight network infrastructure is provided by Shielded Technologies, a company linked to Input Output. The system is designed so that transaction data remains visible only to the bank and its specific customers. This privacy-focused approach operates within existing UK banking protections and compliance rules.
Monument is pitching this effort at retail customers, specifically targeting the mass-affluent segment. Asset manager St. James’s Place defines this group as clients with investable assets between £50,000 and £five million. The bank stated it currently serves more than 100,000 customers with approximately £7 billion in deposits.
The first phase will mirror savings balances on the blockchain network. Later phases are meant to add tokenized investment products such as private market and commodity funds. Subsequent steps include allowing lending against those holdings directly inside the Monument app. The bank expects this evolution to increase customer retention and engagement significantly.
The announcement also points to a wider business strategy involving Monument Technology. This affiliate plans to offer tokenized deposit functionality through its Banking-as-a-Service platform. That could allow other institutions to adopt the same model without building internal infrastructure.
While banks in the UK and elsewhere have explored tokenized deposits, most work to date has focused on institutional use. Prior attempts often relied on closed networks rather than public blockchains. Monument is distinguishing itself by bringing this capability directly to retail clients.
This move marks a step in the push to bring tokenized financial products into regulated banking. It suggests a potential pathway for broader industry adoption if the pilot succeeds. Regulators will likely monitor the interaction between public chains and protected deposits.
Monument Technology aims to scale this functionality across other financial institutions via the BaaS model. Success could pave the way for similar tokenized deposit models throughout the sector. Investors will watch for expansion into the private market funds mentioned in the roadmap.
The integration of privacy-preserving technology with standard banking products represents a complex engineering challenge. Monument Bank must ensure that compliance requirements do not conflict with the immutable nature of the blockchain. Continued development will demonstrate the viability of this hybrid financial model. This strategic positioning could redefine how retail clients interact with digital assets.
