Monument Bank has delayed its planned £250 million retail deposit tokenization project by several months after it was unable to secure a local crypto custody provider that meets Financial Conduct Authority standards and supports zero-knowledge privacy proofs.

The bank had planned to tokenize customer deposits on Midnight, a privacy-focused Layer 1 blockchain project funded by Charles Hoskinson. Monument originally expected to launch to retail customers in November after an additional two months, but that schedule has now been pushed back.

According to the disclosed plan, the project is designed to keep customer information inside Monument’s own systems while using zero-knowledge proofs to demonstrate compliance on-chain and provide audit records to regulators. That privacy architecture appears to be central to the bank’s search for a custody setup that can satisfy both operational and regulatory requirements.

Monument said it has widened its custody search beyond the local market and has identified a Canadian custody institution that is approved by the FCA. The bank did not disclose further implementation details, including the identity of the provider or a revised launch date beyond saying the delay would last several months.

The project was announced in March this year and was aimed at investable assets ranging from £50,000 to £5 million. Earlier reporting described the initiative as a regulated bank effort to bring retail deposits onto a public blockchain framework while preserving account-level privacy and regulatory oversight.

Why It Matters

The delay underscores that tokenized deposits are not only a product or blockchain challenge. They also depend on regulated service providers that can bridge banking compliance, custody controls and specialized blockchain infrastructure. Even when a bank is ready to move forward, a missing piece in that stack can slow deployment.

It also puts attention on privacy-preserving tokenization models for regulated institutions. If banks want to use blockchain rails without exposing sensitive customer data, custody and compliance providers may need to support more complex technical designs than standard digital asset storage alone.