Monument Bank said it plans to tokenize up to 250 million pounds ($335 million) of retail customer deposits on the Midnight network in what it described as the first such move by a UK-regulated bank on a public blockchain.
The London-based challenger bank said the deposits will remain interest-bearing, fully backed by Monument and redeemable on a one-for-one basis in sterling. They also remain covered by the UK Financial Services Compensation Scheme.
The movement marks are a step in the drive to bring tokenized financial products into regulated banking. While banks in Britain and elsewhere have explored tokenized deposits, most work to date has focused on institutional use or closed networks.
Monument is focusing this effort on private clients, starting with those with investable assets between £50,000 and £5 million, the so-called mass affluent, according to asset manager St. James’s Place.
Monument, which says it has more than 100,000 customers and around £7 billion in deposits, said the first phase will reflect savings on Midnight’s privacy-focused blockchain.
Later phases aim to add tokenized investment products such as private market and commodity funds, followed by lending against those holdings in the Monument app.
Midnight Foundation, developed by Shielded Technologies, a company affiliated with Cardano maker Input Output, provides the blockchain infrastructure.
Monument said the system is designed to ensure that transaction data remains visible only to the bank and its customers, while operating within existing UK banking protection and compliance regulations.
The announcement also points to a broader game. Monument said affiliate Monument Technology plans to offer tokenized deposit functionality through its Banking-as-a-Service platform. This could allow other institutions to adopt the same model.