Monument Bank Pushes Back Tokenized Deposit Rollout as Regulatory and Technical Hurdles Persist
AI Market Summary
Monument Bank's delay of its tokenized retail deposit launch highlights ongoing regulatory and infrastructure friction for bank-issued onchain liabilities, despite maintaining 1:1 GBP backing, interest, and FSCS protection. Securing an FCA-approved custodian (now Canadian) reduces counterparty uncertainty, but the timeline slip signals slower commercialization of compliant tokenized deposits. Near-term market impact is limited, yet the episode underscores custody and compliance as key bottlenecks.
Impact level
● Low
Affected assets
BTC/USDT-1.24%
AI Insight · BTC/USDTAI Insight
● Neutral
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UK digital lender Monument Bank has postponed the launch of its retail tokenized deposits, moving the timetable from September to November, ME News reported on Sept. 11 (UTC+8). The delay stems from challenges in securing a UK-based crypto custodian that could satisfy both Financial Conduct Authority (FCA) requirements and the project's zero-knowledge proof technology specifications.
Monument Bank has since selected a Canadian custodian that is approved by the FCA. Under the initiative, the bank plans to tokenize about £250 million of retail deposits on the Midnight blockchain. The tokenized deposits will remain fully backed by Monument Bank, redeemable 1:1 for GBP, accrue interest, and continue to be covered by the UK's Financial Services Compensation Scheme (FSCS).
