Monument Bank delays retail tokenized deposits, cites regulatory issues in the UK

Monument Bank founder Mintoo Bhandari said the London-based firm’s plan to tokenize client deposits on the privacy-focused Midnight blockchain had fallen several months behind schedule due to its inability to find a local crypto custodial service that could meet strict Financial Conduct Authority (FCA) standards and handle zero-knowledge privacy proofs.

"I thought it would have been two months ago that we would have rolled out the first tokenized deposits in the world, but it'll probably be two months more from now," Bhandari said in an interview.

The challenger bank is attempting something few banks have tried: putting interest-bearing retail deposits on a public blockchain, rather than limiting tokenized-deposit projects to institutional customers or closed networks, Bhandari said.

To address the regulatory challenge, Monument had to expand its search for a custody partner internationally. Bhandari said the bank found an FCA-approved custodian in Canada. He declined to identify the company.