Monument Bank, a UK-regulated challenger bank with approximately £7 billion in deposits and over 100,000 customers, announced on March 25, 2026 that it will tokenize up to £250 million ($335 million) of retail customer deposits on the Midnight public blockchain. The program marks the first time a...
"Financial institutions around the world are exploring how blockchain infrastructure can support regulated financial products, but one of the persistent challenges has been balancing transparency with the privacy requirements of modern banking." — Fahmi Syed, President, Midnight Foundation
Monument Bank, a UK-regulated challenger bank with approximately £7 billion in deposits and over 100,000 customers, announced on March 25, 2026 that it will tokenize up to £250 million ($335 million) of retail customer deposits on the Midnight public blockchain. The program marks the first time a UK-licensed bank has placed retail deposit balances on a public chain while maintaining full Financial Services Compensation Scheme (FSCS) protection.
The announcement lands amid an accelerating global race to tokenize bank deposits. In the US, five regional banks — KeyBank, Huntington, First Horizon, M&T, and Old National — are building the Cari Network on ZKsync infrastructure, targeting Q3 2026 pilot and Q4 full rollout. Bank of Montreal is working with CME Group and Google Cloud on institutional tokenized deposits. Over 50% of banks globally are now in some planning stage for tokenized deposits, according to PYMNTS data. The combined signals suggest tokenized deposits are transitioning from proofs-of-concept to production infrastructure.
Monument's choice of Midnight — a privacy-focused chain linked to the Cardano ecosystem and backed by node operators including Google Cloud, MoneyGram, Vodafone, and Blockdaemon — positions the program at the intersection of two contested design questions: public vs. permissioned ledgers, and institutional vs. retail addressability. The economic implications extend beyond Monument itself; the bank's Banking-as-a-Service arm intends to license the infrastructure to other institutions.
Monument Bank targets mass-affluent customers with investable assets between £50,000 and £5 million. The tokenized deposits will maintain three properties that distinguish them from stablecoins or other on-chain dollar representations:
The initial tranche of up to £250 million represents approximately 3.6% of Monument's £7 billion deposit base. CEO Ian Rand has separately stated that Monument is targeting full-year profitability in 2026, with ISA products driving recent deposit growth — deposits have grown sixfold since the end of 2023, according to The Banker.
The program is structured as a collaboration between Monument Bank, the Midnight Foundation, and The Building Blocks, a London-based venture studio.
Monument's selection of Midnight as the underlying ledger is notable for several reasons.
Midnight is a privacy-focused public blockchain developed by Shielded Technologies, which is linked to Input Output (the engineering firm behind Cardano). The network uses zero-knowledge proofs to create a dual-state architecture separating public and private data, enabling selective disclosure to auditors, regulators, or counterparties without exposing full transaction details to the public ledger.
The Midnight mainnet is launching in late March 2026 under its Kūkolu phase (federated mainnet), as confirmed by Charles Hoskinson at Consensus Hong Kong. The federated node operator set includes Google Cloud, MoneyGram, Vodafone (via its Pairpoint division), Blockdaemon, eToro, AlphaTON Capital, and Shielded Technologies. AlphaTON's node agreement disclosures suggest ten founding nodes in total.
The privacy architecture directly addresses a core tension in bank-operated public chain infrastructure: regulatory mandates around customer data confidentiality conflict with the transparency properties that define public blockchains. Midnight's approach — transaction data visible only to the bank and individual account holders — attempts to thread this needle. The Midnight Foundation plans to transition from federated consensus to full decentralization over time.
Whether a newly-launched chain with ten federated nodes can deliver the uptime, security, and throughput guarantees that a regulated bank requires at production scale remains untested. Monument is, in effect, a live experiment.
Monument has outlined a phased implementation:
Phase 1 (Current): Mirror savings balances on Midnight. Up to £250 million in retail deposits tokenized with full FSCS protection and pound-sterling redemption rights. This phase establishes the core token-issuance and redemption infrastructure.
Phase 2: Introduction of tokenized investment products accessible through the Monument app, including private equity and commodity fund exposure. This extends the on-chain asset universe beyond deposits into structured products traditionally reserved for higher-net-worth private banking clients.
Phase 3: Lombard-style lending — borrowing against tokenized holdings without liquidating positions. This is the phase with the most direct revenue implications for Monument, as it would create a new lending product line collateralized by on-chain assets. Lombard lending has historically been confined to private banks serving ultra-high-net-worth individuals; tokenization could lower the operational threshold for offering this service to mass-affluent clients.
No specific dates have been announced for Phases 2 and 3.
Monument's announcement exists within an increasingly crowded competitive field.
United States:
Europe/UK:
Asia:
The regulatory environment for tokenized deposits is developing along different tracks in the UK and US.
United Kingdom: The FCA's October 2025 consultation (CP25/28) on fund tokenization is expected to yield a Policy Statement in H1 2026. The Bank of England is engaging with banks on whether regulatory response is needed to facilitate tokenized commercial bank deposits. The FCA's broader cryptoasset regulation framework (CP25/40) is advancing through consultation. Monument's program operates within existing banking protections — no new authorization was required because the underlying product (a deposit) remains a regulated activity regardless of the settlement infrastructure.
United States: The GENIUS Act, passed in July 2025, established the stablecoin regulatory framework. FDIC guidance on tokenized deposits remains in development. Rich Perez, Vice President of Innovation at the Texas Bankers Association, warned: "Deposits are already moving from banks without on-chain capabilities toward those that offer them."
The divergent timelines create regulatory arbitrage opportunities. Monument's ability to launch without requiring new authorization — because the deposit itself is already regulated — is a structural advantage of the UK's activity-based regulatory approach over the US's entity-based framework.
Biswarup Chatterjee, Global Head of Partnerships and Innovation at Citi Services, has framed tokenized deposits and stablecoins as complementary rather than competing: tokenized deposits operate within bank networks for institutional settlement, while stablecoins serve as "connective tissue when money exits bank networks into external ecosystems."
The distinction matters economically. Tokenized deposits are bank liabilities — they carry deposit insurance, accrue interest, and remain within the regulated banking perimeter. Stablecoins are issuer liabilities backed by reserves but sit outside the banking system. Global customer deposits total approximately $103 trillion (2024 data); the stablecoin market, at roughly $316 billion, represents 0.3% of that figure.
If even 1% of global deposits were tokenized, the resulting market ($1 trillion) would exceed the current stablecoin market by more than 3x. BCG and Ripple project demand for tokenized real-world assets to reach $9.4 trillion by 2030 and $18.9 trillion by 2033. McKinsey's base case for tokenized financial assets is $2.0–2.5 trillion by 2030.
The competitive dynamic is real. As the Cari Network's positioning makes explicit, regional banks view tokenized deposits as a defensive response to stablecoin-based payment rails that could disintermediate their deposit franchises.
Monument's program creates several distinct value flows:
Deposit-holder economics: Customers retain interest income and FSCS protection. The tokenized wrapper adds potential composability (Phase 3 Lombard lending) but the core economic proposition — a savings deposit — is unchanged.
Infrastructure fees: Midnight's fee structure for tokenized deposit transactions has not been disclosed. The network's federated model means node operators (Google Cloud, MoneyGram, etc.) will capture validation fees, though the magnitude is unknown at this stage.
Platform licensing revenue: Monument Technology's Banking-as-a-Service offering could generate recurring licensing fees from other institutions adopting the same infrastructure. This is the most scalable revenue line but depends on demand from other banks.
Lending margin: Phase 3's Lombard lending would generate interest margin for Monument on loans collateralized by tokenized deposits and investment products. This is traditional banking economics applied to a new collateral type.
Network effects: Each additional bank on Monument's BaaS platform increases the interoperability surface and potential settlement network, creating positive externalities for existing participants.
The critical question is whether the infrastructure and compliance costs of maintaining a public-chain deposit system — including smart contract audits, node operation, regulatory reporting across on-chain and off-chain systems — exceed the revenue generated by the incremental products (Lombard lending, BaaS licensing) that tokenization enables.
Monument's £250 million tokenized deposit program is a controlled, phased entry into production-grade public-chain banking infrastructure. The program's significance lies not in its initial scale — £250 million is 3.6% of Monument's deposit base — but in its structural precedent: a regulated bank, with full deposit insurance, operating on a public blockchain for retail customers.
The timing is instructive. Monument launches on a network (Midnight) that is itself days old in its mainnet form. The Cari Network's US consortium is months behind. JPMorgan's Kinexys has processed hundreds of billions but remains institutionally focused. No major bank has yet put retail deposits on a public chain with deposit insurance intact.
The program's success or failure will be measured on three axes: customer adoption rate, BaaS licensing traction from other institutions, and whether the Phase 2 and Phase 3 product expansions materialize on a timeline that justifies the infrastructure investment. The data from this experiment will inform whether tokenized deposits on public chains become standard banking infrastructure or remain a niche offering.
As Rich Perez of the Texas Bankers Association observed: "The real question for your members is participation: being part of this infrastructure shift, or watching competitors define it."