A landmark project to tokenize 250 million pounds ($330 million) in U.K. retail bank deposits was delayed past its initial internal deadline as Monument Bank worked to resolve an institutional custody bottleneck.
Monument Bank founder Mintoo Bhandari told CoinDesk that the London-based firm’s plan to tokenize client deposits on the privacy-focused Midnight blockchain had fallen several months behind schedule due to its inability to find a local crypto custodial service that could meet strict Financial Conduct Authority (FCA) standards and handle zero-knowledge privacy proofs.
"I thought it would have been two months ago that we would have rolled out the first tokenized deposits in the world, but it'll probably be two months more from now," Bhandari said in an interview.
The challenger bank is attempting something few banks have tried: putting interest-bearing retail deposits on a public blockchain, rather than limiting tokenized-deposit projects to institutional customers or closed networks, Bhandari said. To address the regulatory challenge, Monument had to expand its search for a custody partner internationally. Bhandari said the bank found an FCA-approved custodian in Canada. The Monument founder said he was unable to identify the Canadian custody company for now as the companies have not announced their partnership publicly yet.
Midnight, the Charles Hoskinson-funded privacy-focused layer one blockchain firm, uses zero-knowledge proofs to keep customer information within Monument’s systems while allowing the bank to prove onchain compliance and provide regulators with the records needed for audits.
Fahmi Syed, president of the Midnight Foundation, said the custody problem was not just about finding a willing partner but also about asking an entire industry to work differently.
Monument Bank announced the project in March. It said it aims to give mass-affluent savers access to tokenized private equity, structured products and automated Lombard lending inside a regulated app.
Bhandari said client deposits will remain interest-bearing, fully backed by Monument and redeemable one-for-one in pounds sterling. They will also remain covered by the Financial Services Compensation Scheme (FSCS), with a 120,000 pound limit per person or company.
Monument is pitching this effort at retail customers, starting with clients with investable assets between 50,000 pounds and 5 million pounds, a group identified by asset manager St. James's Place as "mass-affluent."
CORRECTION (Sept. 11, 2026, 02:01 UTC): Corrects headline, clarifies details in first paragraph about Monument’s planned launch, removing that delay was due to regulatory reasons. CORRECTION (Sept. 11, 2026, 08:06 UTC): Corrects to say Mintoo Bhandari is the founder not the CEO.
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
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