Monument Bank has joined hands with the Midnight Foundation to become the first UK bank to tokenize retail customer deposits on a public blockchain.
The initial phase of this initiative plans to transfer up to GBP 250 million in customer deposits onto Midnight’s network, ensuring that each digital token corresponds precisely one-to-one with funds held at Monument Bank. These deposits will continue to be fully backed by the bank and remain redeemable in pounds sterling while being protected under the Financial Services Compensation Scheme (FSCS).
The rollout is structured across three main phases. Phase one focuses on tokenizing existing deposits and laying down the necessary infrastructure. Phase two introduces the use of tokenized real-world asset products, such as private equity, commodity funds, and structured financial instruments, which will be accessible through Monument’s app and managed by global asset managers. Customers can gain exposure to these asset classes without needing to directly hold or manage digital assets, as the blockchain technology operates within the regulated banking environment.
Phase three aims to introduce Lombard-style lending, enabling customers to borrow against their investments without having to liquidate their positions. This form of credit has historically been associated with private banking services for high-net-worth individuals and institutional investors but Monument intends to make it accessible to a broader retail client base through its app.
Together, these phases are designed to create an integrated platform where customers can save, invest, and access credit. Additionally, Monument Technology Ltd, a subsidiary of Monument Bank, aims to offer tokenized deposit functionality to other institutions via its Banking as a Service (BaaS) platform.
Privacy Infrastructure and Regulatory Compliance
The initiative is built on Midnight’s blockchain infrastructure, which ensures that transaction data remains accessible only to Monument Bank and its customers. This architecture addresses the confidentiality and compliance needs of regulated financial services environments.
Daniel Fozzati, founding partner of The Building Blocks, added: This partnership marks a key milestone in the maturation of blockchain technology, proving that next-generation technologies and the highest standards of regulatory compliance can work together to deliver superior customer experiences and value. The Building Blocks is delighted to have joined forces with Monument on this pioneering endeavor.
The approach taken by Monument is generally aligned with the direction signaled by UK regulators in recent years, who have encouraged banks to explore how tokenized deposits could enhance digital money efficiency while maintaining consumer protections.
Furthermore, by integrating blockchain infrastructure directly into the consumer banking experience, Monument offers a distinct path from major institutions that have primarily focused on wholesale and institutional use cases for tokenized deposit technology.
The interest in tokenized financial assets has seen considerable growth. Boston Consulting Group estimates that these assets could reach between USD 4 trillion and USD 16 trillion by 2030, reflecting broader institutional momentum around settlement efficiency, collateral management, and access to private markets.
