Monument Bank Delays Tokenized Deposit Launch Over UK Custody Bottleneck
Deposit Tokenization Project Postponed
Monument Bank has delayed its plan to tokenize 250 million pounds ($330 million) in retail deposits due to a custody bottleneck in the UK. The bank, based in London, expected to roll out the tokenized deposits earlier but now targets November 2026.
Key Details of the Delay
- The delay stems from the inability to find a local crypto custodial service that meets the Financial Conduct Authority's (FCA) strict standards.
- The custodian must also handle zero-knowledge privacy proofs, a technology used for privacy and compliance.
- Monument Bank found an FCA-approved custodian in Canada to resolve the issue.
What Monument Bank Founder Mintoo Bhandari Said
Mintoo Bhandari, founder of Monument Bank, explained that the project fell several months behind schedule. He originally thought the rollout would have been two months ago but now expects it to be two months from now. Bhandari noted that the bank had to expand its search internationally for a suitable custodian.
He declined to name the Canadian custodian company.
Project Background and Features
Monument Bank announced the project in March 2026. The tokenized deposits will be on the Midnight blockchain, which uses zero-knowledge proofs to keep customer information private while allowing the bank to prove compliance on-chain. This means the bank can show regulators records for audits without revealing sensitive data.
The deposits will remain interest-bearing, fully backed by Monument, and redeemable one-for-one in pounds sterling. They will also be covered by the Financial Services Compensation Scheme (FSCS), which protects up to 120,000 pounds per person or company.
Why This Matters for Retail Crypto Banking
This project is a landmark attempt to tokenize retail bank deposits on a public blockchain, rather than limiting such efforts to institutional customers or closed networks. It aims to give 'mass-affluent' clients—those with 50,000 to 5 million pounds in investable assets—access to tokenized private equity, structured products, and automated lending within a regulated app.
Revised Timeline and Next Steps
Monument Bank now expects to launch the tokenized deposit service by November 2026, once the custody issue is fully resolved.
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