LONDON (Reuters) – The Bank of England set out plans on Wednesday to regulate wholesale cash distribution in Britain to ensure that bank notes and coins remain easily available as a means of payment for customers and businesses, despite declining usage.
Cash accounted for just 15% of purchases at major UK retailers last year, and in May the government said it would set out legislation to ensure providers continued to meet demand.
“Declining cash volumes have caused inefficiencies that are putting the UK cash infrastructure under pressure, creating risks of disruption to consumers and businesses who need access to cash,” the BoE said.
Under the proposed legislation, which the BoE is putting out to consultation, the central bank would get new powers to regulate businesses in wholesale cash distribution.
The BoE is seeking the power to impose fines and to enforce supervisory guidance given to cash distribution companies, as well as to require information that is currently only provided voluntarily, such as profitability and medium-term plans.
The sector is fragmented, but if a single systemically important cash distributor did emerge, it would need to be regulated similarly to a major payments platform, the BoE said.
Ad: Save every day with Amazon Deals: Check out today's daily deals on Amazon.
The consultation will run until Feb. 10.
(Reporting by David Milliken; Editing by Kate Holton and Andy Bruce)