In a landmark move for blockchain adoption in traditional finance, London-based Monument Bank has announced a partnership with the Midnight Foundation to tokenize up to £250 million (approximately $335 million) of retail customer deposits. This initiative positions Monument as the first regulated UK bank to tokenize retail deposits on a public blockchain network.
The tokenized deposits will be digital representations of funds already held by the bank, backed one-to-one by traditional deposits in pounds sterling. Customers will retain full banking protections, including the ability to earn interest and redeem holdings for cash, with deposits remaining covered under the UK Financial Services Compensation Scheme (FSCS) up to £85,000 per customer.
The project will utilize the privacy-focused Midnight blockchain, designed to keep transaction details confidential and visible only to authorized parties, thereby addressing regulatory concerns over data transparency. Charles Hoskinson, founder of IOHK which is associated with the Midnight ecosystem, hailed the deal as "one of the largest we've ever done" and stated it "could bring hundreds of millions to billions in Total Value Locked (TVL) to the Midnight ecosystem."
The initial phase involves a rollout of up to £250 million from Monument's total deposit base of around £7 billion. The bank plans a phased expansion, with future stages potentially introducing access to tokenized investment products like private equity and commodities, traditionally reserved for institutional or high-net-worth investors. Another planned feature includes allowing customers to borrow against their tokenized assets, unlocking liquidity without selling investments.
This retail-focused approach distinguishes Monument's project from previous blockchain trials by major banks like HSBC, Lloyds, and JPMorgan, which primarily targeted institutional use. The initiative signals a potential shift toward mainstream, blockchain-powered banking solutions that promise greater efficiency, flexibility, and access to a wider range of financial products.
