HM Treasury has published a Policy Statement on its plans for protecting the U.K.'s wholesale cash infrastructure. In recent years, use of cash has diminished in favour of cashless transactions but the U.K. government is aware of the need to continue supporting cash transactions, particularly for elderly and vulnerable groups. The government has been investigating the use and protection of cash payments in the retail sector, including a consultation on protecting access to cash launched in 2021. The results of that consultation are under consideration.
HM Treasury observes that in order to support access to cash, the wholesale cash system must be sustainable and resilient. The wholesale cash system consists of a select group of key market participants which facilitate the production and distribution of banknotes and coins. HM Treasury is proposing to provide the Bank of England with powers to oversee the wholesale cash industry to ensure it continues to operate effectively, which would be divided into the following:
(i) set objectives for designated entities, e.g., high level principles (as approved by HM Treasury) and codes of practice for the operations of designated entities;
(ii) require designated entities to supply information to enable the bank to build a picture of the market and keep abreast of any risks; and
(iii) direct industry, for example mandate or prohibit certain actions and require the payment of fees (on a scale approved by HM Treasury and Parliament) by designated entities to cover their costs for operating the regime.
HM Treasury would determine the designated entities for market oversight purposes, which could include all those providing wholesale cash activities or financial support to those activities and any other critical service providers.
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