UK Bank Monument Moves Tokenized Deposits On-Chain

Background and Context

Monument’s tokenization strategy builds on its founding objective to deliver modern, technology driven financial services to underserved mass affluent customers. As a digital first challenger bank launched in 2022 with a cloud native operating model, Monument has actively pursued partnerships that extend its Banking as a Service capabilities. In this case, the bank has collaborated with the Midnight Foundation and London venture studio The Building Blocks to deploy privacy preserving blockchain infrastructure that integrates with its regulated deposit platform.

This initiative reflects a broader industry shift toward tokenized deposits as a practical and lower risk pathway for blockchain adoption. Regulators and financial institutions increasingly view tokenization as a way to enhance payment efficiency, settlement speed, and access to financial assets without introducing systemic instability or moving activities outside existing regulatory perimeters. Global projections suggest tokenized financial assets could reach between $4 trillion and $16 trillion by 2030. The banks continue to explore how on chain technology can support both retail and institutional use cases.

Although UK banks such as Barclays, HSBC, Lloyds, NatWest, Nationwide, and Santander have already participated in pilot programs like the Great British Tokenised Deposit initiative, those projects focused primarily on institutional workflows or permissioned environments. Lloyds completed a tokenized deposit transaction linked to gilt purchases earlier in 2026. Monument’s program differs because it directly targets everyday retail savings accounts on a public blockchain while preserving statutory deposit protections.

How the Tokenization Works

Under the proposed structure, Monument tokenized deposits will mirror customer savings balances as digital tokens on the Midnight network. These tokens will not function as new crypto assets or independent liabilities. Instead, they will represent regulated GBP deposits held on Monument’s balance sheet. Customers will continue to earn interest at existing rates and retain full redemption rights. In addition, FSCS protection will remain unchanged, covering eligible deposits up to £85,000 per depositor.

The Midnight network incorporates zero knowledge proof technology to maintain financial confidentiality. Transaction data remains visible only to the bank and the individual customer, which addresses a key barrier to public blockchain adoption among regulated institutions. At the same time, blockchain settlement infrastructure can enable faster transfers, programmable financial services, and improved interoperability with tokenized investment products. Monument plans to run blockchain operations seamlessly within its regulated environment so that customers do not need to manage wallets or interact directly with crypto interfaces during the initial phase.

Future Phases and Industry Implications

Monument has structured the rollout in multiple stages to gradually expand on chain financial capabilities. After completing the initial £250 million deposit tokenization phase, the bank plans to introduce tokenized real world assets such as private equity exposures, commodity funds, and structured investment products through its mobile application. This step could broaden retail access to asset classes that traditionally required higher wealth thresholds or institutional channels.

In addition, Monument intends to offer Lombard style lending services that allow clients to borrow against their portfolios without liquidating investments. Such financing solutions have historically catered to ultra high net worth individuals. Integrating them into a mass affluent banking platform could reshape how liquidity management and portfolio optimization function in retail wealth segments.

From a broader industry perspective, Monument Technology also aims to license its tokenized deposit model through its Banking as a Service platform. This strategy could enable other banks and fintech firms to adopt similar frameworks, potentially accelerating sector wide experimentation with regulated blockchain infrastructure.