Monument Bank Delays Tokenized Retail Deposits Amid UK Custody Hurdles

London based challenger bank Monument Bank has delayed its landmark plan to tokenize 250 million pounds in retail deposits after struggling to find a UK-based crypto custody provider capable of meeting strict Financial Conduct Authority standards. The bank’s founder said the project, originally expected to launch months ago, is now targeting a rollout by November after the search for a compliant custodian took far longer than anticipated.

International Search Leads to Canadian Partner

Unable to secure a suitable domestic custodian capable of handling the zero knowledge privacy technology required for the project, Monument expanded its search internationally and ultimately found an FCA-approved custody provider based in Canada, though the bank declined to name the company. The project relies on the privacy focused Midnight blockchain, which uses zero-knowledge proofs to keep customer data within Monument’s own systems while still allowing the bank to demonstrate regulatory compliance.

Project Targets Mass-Affluent Retail Customers

Announced in March, the initiative aims to give clients with investable assets between 50,000 and 5 million pounds access to tokenized private equity, structured products and automated lending services through a regulated app. Deposits will remain interest bearing, fully backed by the bank, and covered under the UK’s standard deposit protection scheme up to its usual limit. Industry officials involved in the project noted that the custody challenge reflected broader difficulties in getting an entire industry to adapt to new blockchain-based infrastructure.