Monument Bank, a UK-regulated challenger bank, is preparing to tokenize up to £250 million ($335 million) in retail customer deposits on the Midnight network, a public blockchain developed by Shielded Technologies, the engineering spin-out from Cardano creator Input Output.
The deposits will remain interest-bearing, fully backed by Monument, and redeemable one-for-one in pounds sterling. They will also keep their coverage under the UK's Financial Services Compensation Scheme (FSCS), which protects eligible deposits up to £85,000 per person per institution. It is the first time a UK-regulated bank has placed insured deposits on a public blockchain.
Why Midnight, and Why Now
Midnight is a privacy-focused partner chain to Cardano that uses zero-knowledge proofs to keep transaction data visible only to authorized parties. For Monument, this means customer deposit balances can exist on-chain without exposing account details to the public. Transaction data remains visible only to the bank and its customers, while operating within existing UK banking protections and compliance rules.
The timing coincides with Midnight's late-March mainnet launch, which Cardano founder Charles Hoskinson announced in February. The network targets the real-world asset (RWA) tokenization market with cross-chain integration via LayerZero.
Monument is not a high-street name. It serves mass-affluent clients with investable assets between £50,000 and £5 million, a niche that has historically relied on private banking services with higher minimums. The bank is FCA-authorized and appears on the FCA Register.
The Three-Phase Plan
Monument described a phased rollout:
Phase 1 mirrors savings balances on the Midnight blockchain. Deposits stay in the bank's balance sheet, earn interest, and gain a tokenized representation on-chain. This is the "first step" that preserves every existing protection while adding blockchain-based record-keeping.
Phase 2 adds tokenized investment products, including private markets and commodities. This is where the model starts to diverge from a traditional savings account: tokenized deposits could serve as collateral or settlement instruments for on-chain investment products.
Phase 3 introduces lending against tokenized holdings. If a customer's deposit token represents a verified, FSCS-insured claim on pounds held at a regulated bank, it becomes a collateral asset that other protocols or institutions could accept.
Monument Technology, an affiliate of the bank, plans to offer this tokenized functionality via a Banking-as-a-Service (BaaS) platform. That means other institutions could adopt the same model without building it from scratch.
How This Fits the Broader Tokenized Deposit Race
Monument is not the only bank moving here. In January, Lloyds Banking Group and Archax completed the UK's first public blockchain transaction using tokenized deposits on the Canton Network. Barclays, HSBC, and other UK banks are participating in UK Finance's Great British Tokenised Deposit pilot, which is testing three use cases through mid-2026.
Across the Atlantic, a consortium of US regional banks, including Huntington Bancshares, First Horizon, M&T Bank, and KeyCorp, is building a tokenized deposit network on zkSync designed to compete directly with stablecoins. They are targeting a Q4 launch.
The difference with Monument is the public blockchain choice. Lloyds used Canton, a permissioned network. The US consortium chose zkSync, an Ethereum Layer 2. Monument picked Midnight, a privacy chain linked to Cardano's ecosystem.
For stablecoin-funded crypto cards, this matters. If tokenized deposits gain traction as an on-chain settlement instrument, they could eventually compete with USDC and USDT for the same rails. Tokenized deposits carry deposit insurance and regulatory compliance by default, something no stablecoin currently offers in the UK. Tether recently hired a Big Four audit firm to close this credibility gap, but deposit insurance is a structural advantage that no audit can replicate.
What FSCS Protection Actually Covers
The FSCS protects eligible deposits up to £85,000 per person per authorized institution. Monument's tokenized deposits fall under this scheme because the underlying asset remains a regulated bank deposit. The token is a digital representation of the claim, not a new financial instrument.
This distinction is important. When a customer holds a tokenized deposit, they hold a bank liability, not a bearer asset. If Monument fails, the FSCS process applies exactly as it would for a non-tokenized deposit. The blockchain layer adds transparency and programmability without changing the legal status of the money.
Compare this to stablecoins: USDC and USDT are not bank deposits. They are not FSCS-protected (or FDIC-protected in the US). Holders are unsecured creditors of the issuer. The difference between a tokenized deposit and a stablecoin is the difference between an insured bank claim and a money market fund share with no insurance.
The Privacy Trade-Off
Midnight's zero-knowledge architecture means that on-chain observers cannot see individual balances or transaction amounts. Only the bank and its customers have visibility. This addresses one of the main objections banks have raised about public blockchains: that exposing customer financial data on a transparent ledger is incompatible with banking regulations.
But it also limits composability. A fully transparent token like USDC can be integrated into DeFi protocols, used as collateral on lending platforms, and tracked by anyone. A privacy-shielded tokenized deposit cannot do those things by default. Monument will need to build selective disclosure mechanisms if it wants its tokens to interact with the broader on-chain ecosystem.
The crypto market, as of March 25, 2026, sits at BTC $71,855 (+1.8% in 24 hours), ETH $2,195 (+2.0%), with the Fear & Greed Index at 37 (Fear). The tokenized deposit narrative is moving independently of price action, driven by institutional infrastructure buildout rather than speculation.
Overview
Monument Bank plans to tokenize up to £250 million in retail deposits on the Midnight network, a Cardano-linked privacy blockchain, while keeping FSCS protection and interest payments intact. The phased rollout starts with savings balance mirroring and expands to investment products and lending. It is the first time a UK-regulated bank has placed insured deposits on a public blockchain, adding to a growing race between Lloyds (Canton Network), US regional banks (zkSync), and now Monument (Midnight) to bring traditional deposits on-chain.
