Monument Bank tokenized £250 million in real customer deposits on Cardano's (ADA) Midnight protocol in early 2026, marking the first time a regulated bank has moved live funds onto a privacy-preserving blockchain.
Midnight's Zero-Knowledge Architecture
The protocol launched on mainnet in late 2025 as a partner chain to Cardano, built around zero-knowledge proofs known as zk-SNARKs. The technology lets a bank verify a transaction is compliant without exposing its details on a public ledger.
That sets Midnight apart from privacy coins like Monero or Zcash.
Its developers call the approach "rational privacy," where users selectively share data with regulators or auditors while shielding it from competitors.
Monument's £250 million deployment represents interest-bearing savings tokenized as digital assets, fully backed and redeemable in GBP. Nine major firms already run Midnight nodes, including Worldpay, which is exploring USDG stablecoin merchant payments, and Bullish, which is building proof-of-reserves layers on the infrastructure.
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Compliance Gap on Public Chains
Public blockchains like Ethereum (ETH) expose every transaction to all participants. For banks executing large settlements, that amounts to broadcasting order flow to every competitor with a node. Solana (SOL) carries the same limitation.
Midnight addresses three needs regulated institutions face at once: transaction privacy, verifiable compliance, and programmable KYC/AML logic inside smart contracts.
The EU's MiCA framework, now live, pushes institutional crypto activity toward auditable infrastructure. GDPR adds further friction for banks storing customer data on transparent ledgers.
Hoskinson's Cross-Chain Vision
Charles Hoskinson has described Midnight's potential in broad terms, arguing that adding it to XRP (XRP) DeFi "is going to blow the legacy banks out of the water." He has proposed Midnight as a shared privacy layer for both Bitcoin (BTC) and the XRP Ledger.
The target is the $10 trillion real-world asset tokenization market. Growing security pressures on crypto infrastructure help explain why privacy-preserving layers are drawing institutional attention now.
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