Monument Bank delays £250 million retail tokenized deposit launch due to UK regulatory hurdles

UK digital challenger Monument Bank has delayed its landmark £250 million retail deposit tokenization project past its initial deadline, now targeting a November 2026 launch. Founder Mintoo Bhandari cited an institutional custody bottleneck, as the firm struggled to find a UK-based custodian meeting Financial Conduct Authority standards for zero-knowledge proofs. To bypass this, Monument partnered with an unnamed Canadian custodian. The project, built on the Charles Hoskinson-backed Midnight blockchain, aims to offer mass-affluent savers secure, interest-bearing tokenized deposits.

Monument Bank tokenized deposit delay

• ▪Monument Bank founder Mintoo Bhandari stated in September 2026 that the tokenized deposit rollout is targeting a launch around November 2026, representing a delay of several months.
• ▪London-based digital challenger Monument Bank delayed its plan to tokenize £250 million ($330 million) in retail bank deposits past its initial internal deadline.

UK crypto custody regulatory bottleneck

• ▪To resolve its custody bottleneck, Monument Bank expanded its search internationally and partnered with an unnamed Financial Conduct Authority-approved custodian based in Canada.
• ▪Monument Bank's tokenized deposit delay was caused by an institutional custody bottleneck and an inability to find a local UK crypto custodian meeting Financial Conduct Authority standards.

Midnight blockchain privacy technology

• ▪Monument Bank is tokenizing its retail deposits on Midnight, a privacy-focused layer-one blockchain backed by Cardano founder Charles Hoskinson.
• ▪The Midnight blockchain uses zero-knowledge proofs to keep customer financial data within Monument Bank's internal systems while proving regulatory compliance and providing audit records on-chain.

Mass-affluent retail banking strategy

• ▪The tokenized deposits will remain interest-bearing, fully backed 1:1 by pounds sterling, and covered by the UK Financial Services Compensation Scheme up to a £120,000 limit.
• ▪Monument Bank's tokenization project targets mass-affluent retail savers with investable assets between £50,000 and £5 million, rather than limiting the project to institutional customers.

Debatable claims

• ▪Regulated banks should avoid using public blockchains for retail deposits
• ▪Regulated banks should not offer tokenized deposits to retail customers
• ▪Strict UK crypto custody regulations stifle financial innovation