Monument Bank delays tokenized deposit rollout amid UK custody hurdle

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Monument Bank tokenized deposit delay

Highlights

Monument Bank delays its launch of tokenized deposits on the Midnight blockchain by about two months due to difficulties finding a compliant UK crypto custodian.
The bank expands its custody search overseas and secures an FCA-approved crypto custodian in Canada to meet zero-knowledge privacy proof requirements.
Monument targets mass-affluent clients with investable assets of 50,000 to 5 million pounds, offering interest-bearing, FSCS-protected tokenized deposits redeemable one-for-one in pounds.

Custody search slows blockchain savings launch

As first reported by CoinDesk, Monument Bank says its plan to tokenize client deposits on the privacy-focused Midnight blockchain has slipped by several months because it cannot find a local crypto custody provider able to satisfy strict Financial Conduct Authority standards and support zero-knowledge privacy proofs.

Founder Mintoo Bhandari says the London-based challenger bank expected to roll out what he describes as the first tokenized deposits in the world about two months earlier, but the launch is now likely to take about two months more. He says the bank has broadened its search overseas and found an FCA-approved custodian in Canada, although he declines to name the company.

The project seeks to move interest-bearing retail deposits onto a public blockchain rather than confining tokenized deposit models to institutional clients or closed networks. Midnight, a layer-1 blockchain backed by Charles Hoskinson, uses zero-knowledge proofs to keep customer information within Monument's own systems while allowing the bank to demonstrate onchain compliance and provide records for audits.

Product scope and regulated client offering

Monument Bank announces the project in March and says it targets clients with investable assets of between 50,000 pounds and 5 million pounds, a segment identified by St. James's Place as mass-affluent. The bank plans to use the structure to give those customers access to tokenized private equity, structured products and automated Lombard lending within a regulated application.

Bhandari says the deposits remain interest-bearing, fully backed by Monument and redeemable one-for-one in pounds sterling. He adds that the balances also remain protected by the Financial Services Compensation Scheme, which covers up to 120,000 pounds per person or company.

Our earlier coverage of offshore trust structures for crypto wealth explained that more crypto entrepreneurs and investors are looking to place digital-asset wealth into trusts for long-term preservation and potential tax efficiency. It also noted that many trustees remain reluctant to accept crypto because of compliance and verification challenges, perceived volatility, and fiduciary-duty constraints—especially when clients want trustees to hold tokens directly.

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