Monument Bank, a United Kingdom-based challenger bank, has announced plans to tokenize as much as 250 million pounds, equivalent to approximately $335 million, in retail customer deposits. The tokenization will take place on Midnight, a public blockchain network. The initiative represents a notable step toward integrating blockchain technology with regulated retail banking in the UK.
Despite being placed on the blockchain, the deposits will continue to earn interest and remain fully backed. Customers will also retain protection under the UK Financial Services Compensation Scheme, meaning their funds are safeguarded in the same manner as conventional bank deposits. This structure is intended to ensure that the move to tokenized deposits does not alter the fundamental protections available to retail customers.
The development could have broader implications for the UK banking sector. Monument Bank operates a Banking-as-a-Service platform, which other financial institutions can use to build and offer their own products. By introducing a tokenized deposit model through this platform, Monument may open the door for other banks and financial firms to adopt similar approaches without building the infrastructure from scratch.
Tokenized deposits represent a growing area of interest among financial institutions globally, as they seek to harness the efficiency and programmability of blockchain networks while remaining within established regulatory frameworks. Monument’s approach attempts to bridge that gap by maintaining full regulatory compliance alongside the technical innovation. The use of a public blockchain, rather than a private or permissioned one, is also a notable aspect of the plan.
No timeline for the full rollout has been specified in the available details, but the announcement signals Monument’s intent to position itself at the forefront of deposit tokenization within the UK market. If successful, the model could influence how challenger banks and traditional institutions alike approach the digitization of customer funds in the future.
Originally reported by CoinDesk.
