Monument Bank plans £250M deposit tokenization on Midnight

Monument Bank, a regulated UK retail-focused bank in London, says it will tokenize up to £250 million (about $335M) of customer deposits on the Midnight blockchain—calling it the first UK “deposit tokenization” model for retail savings. Under the proposal, customer balances are converted into tokens, but the bank claims deposits stay 100% backed at all times. Users can redeem 1 token for £1, so the tokens are intended to track a savings account rather than an unbacked crypto asset. Monument also says protection would continue under the UK Financial Services Compensation Scheme (FSCS), which typically covers up to £85,000 per customer. The system uses Midnight’s privacy/security approach, with transaction details hidden from the public and visible only to approved parties. In the first phase, Monument targets about £250 million in tokenized deposits, and later phases may expand to other on-chain products, including structured products, private-equity-like exposure, commodities funds, and new lending models. For crypto traders, this is a notable adoption milestone for regulated tokenized finance, but the immediate market impact on major crypto prices is likely limited—near-term attention will focus on regulatory acceptance and whether deposit tokenization meaningfully drives wider on-chain demand over time. Deposit tokenization is positioned as “bank rails” rather than a new speculative asset.