Monument Bank Delays Launch of Tokenized Deposits Due to UK Regulatory Challenges

ChainCatcher report: London challenger bank Monument Bank has delayed its project to tokenize £250 million (approximately $330 million) in UK retail deposits by several months, due to its inability to find a local crypto custodian in the UK that meets Financial Conduct Authority (FCA) standards and can handle zero-knowledge privacy proofs. Monument Bank founder Mintoo Bhandari stated that the bank originally planned to tokenize customer deposits on the privacy-focused public blockchain Midnight, aiming to launch the world’s first tokenized deposits two months ago; however, the launch to retail customers is now expected in November, two months later. To meet regulatory requirements, the bank expanded its search for a custodial partner overseas and ultimately identified a Canadian custodian approved by the FCA. Midnight is a privacy-first Layer 1 blockchain project funded by Charles Hoskinson, using zero-knowledge proofs to keep customer information within Monument’s internal systems while enabling the bank to prove compliance on-chain and provide audit trails to regulators. Monument Bank announced the project in March this year, intending to offer tokenized private equity, structured products, and automated Lombard loans to “mass affluent” clients with investable assets between £50,000 and £5 million. Bhandari noted that customer deposits will continue to earn interest, be fully backed by Monument, redeemable 1:1 for GBP, and protected by the Financial Services Compensation Scheme (FSCS), with a limit of £120,000 per individual or company.