Wall Street tokenization stays institutional while a UK challenger bank targets retail deposits

Major U.S. banks have moved large volumes of money onto blockchain platforms, yet their tokenized‑deposit services remain confined to institutional customers and private networks. Monument Bank, a UK challenger bank, is preparing to launch the first retail‑focused tokenization of interest‑bearing deposits.

Institutional tokenization today

JPMorgan processes more than $3 trillion through its Kinexys blockchain system, while Citi Token Services handles billions of dollars in cross‑border payments each day. Both banks use tokenized deposits and stablecoins on permissioned ledgers, but the offerings are restricted to corporate clients and treasury desks.

Why retail tokenization has lagged

According to Monument Bank founder Mintoo Bhandari, most existing token projects are internal and do not move the needle for everyday consumers. Legacy banking systems, many dating back to the 1970s, limit the ability to deploy a unified blockchain solution across all customer segments.

Monument Bank’s retail tokenization plan

Monument intends to tokenize up to £250 million (about $335 million) of retail deposits on the public blockchain Midnight. The deposits will remain interest‑bearing, fully backed by Monument, and redeemable one‑for‑one in pounds sterling with Financial Services Compensation Scheme protection up to the scheme’s limits.

The bank will use zero‑knowledge proofs (ZK$0.01110) to verify compliance conditions without exposing personal data on‑chain. Customers will interact with a standard banking app and will not need to understand or manage cryptocurrency directly.

Potential extensions

If successful, Monument plans to license the underlying technology to other banks through a unit called Monument Technology. Longer‑term goals include offering tokenized private‑equity exposure, structured products and Lombard lending within the same regulated app.

Challenges and considerations

• Maintaining privacy while meeting regulatory requirements.
• Ensuring liquidity across multiple blockchain networks does not create capital inefficiency.
• Bridging private and public ledgers without data leakage.