The Financial Services Consumer Panel is an independent statutory body. We represent the interests of individual and small business consumers in the development of policy and regulation of financial services in the UK.


Money is a cornerstone of modern society. We all depend on money to make and receive payments and to store and measure value. All parts of our society need access to the monetary or payment system and to trust the money that is transacted through it.


The Bank of England (the Bank) has long issued a form of money and provided a visible, tangible and accessible means of payment for consumers through its banknotes. The ongoing transition to a more digital economy has seen an increase in the use of electronic and digital payments and a decrease in the transactional use of banknotes. We expect these trends to continue, with increased innovation around digital forms of payment, including new forms of digital money and, potentially, a Central Bank Digital Currency (CBDC).


While the Bank has made clear that a CBDC would not replace banknotes as long as there is demand for them, demand for and acceptance of physical cash is likely to continue decreasing both in line with the rising cost (and inconvenience) of accepting and paying with it and in line with the rise of the digital economy.  Consumers therefore risk losing access to the most accessible and basic form of payment, as well as access to a visible and tangible manifestation of central bank money. This, alongside the likely emergence of new private forms of digital money raises important questions around trust, consumer understanding, access and transferability.


Given the potential import of these developments and the risks and benefits they might pose, it is important to take stock of the current systems as well as to explore the risks and benefits of new forms of digital money, including CBDC. We have therefore welcomed the Bank and HM Treasury’s ongoing exploratory work in this area, as well as their work on new forms of digital money[1], cryptoassets[2] and the wider payments landscape[3].


Any decision on whether and how to issue a CBDC should have particular regard to the benefits that such an instrument can bring to consumers (including small businesses), especially as regards: safety and consumer protection; cost and speed of settlement; financial inclusion and cross border payments. Whilst there has been plentiful innovation in the domestic payments arena in recent years, some of this has come at the cost of safety and consumer protection and we have seen little evidence of this translating into lower payment prices for merchants, especially smaller ones. Furthermore, whilst there has been some welcome innovation directed at unbanked consumers, there is still ample room to address the associated costs and risks that such consumers face, which a CBDC could usefully address. While recognising that a CBDC will, by definition, be digital its design should ensure accessibility to all consumers, including those with physical impairments or limited digital access or capabilities. Similarly, whilst the decision on whether and how to proceed with a CBDC is a decision for the UK to make, any design decisions should bear in mind overseas CBDCs to allow for potential cross border CBDC transactions, increasing the speed and lowering the costs of international payments.


A lot of work on digital money and CBDC has already been undertaken wherein banking and technology experts and other private sector participants have been central to discussions.  While we recognise that these issues have important implications for financial stability as well as for private commercial interests, they also have significant societal consequence and so consumer considerations must be central to discussions. We therefore particularly welcome this Committee’s inquiry on the economics of CBDC and hope that the Committee will prioritise consumer considerations within its work.


We set out below our view of what a well-functioning payments landscape – which could include CBDC - looks like for UK consumers. As in all areas of financial services, we believe money providers and payments firms should have a duty to act in the best interests of consumers. The market should also be guided by the following principles:








Money and the payment system rely on trust – none more so than consumers’ trust. Whatever digital innovations the future holds, consumer trust must be maintained in the form of money, in the way it is transacted and the way in which privacy is protected. Whether or not the Bank and HM Treasury decide to pursue a CBDC, we hope that the current work – including this Committee’s inquiry – will serve to help design a future-proof payments framework that will ensure this is the case.


14 October 2021




[1] For the Panel’s response to the Bank’s discussion paper, see here:

[2] For the Panel’s response to HM Treasury’s cryptoasset and stablecoin consultation, see here:

[3] For the Panel’s response to the Payments Landscape Review call for evidence, see here: