Wholesale cash distribution in the future

We’re taking steps to ensure an effective, resilient and sustainable cash distribution system, so people who want to continue using cash are able to.

Overview

Wholesale cash distribution is a key part of protecting public access to cash. It supplies banknotes and coin to bank branches, ATMs and retailers and ensures that cash deposits are processed and recirculated into the public domain. The wholesale cash system therefore plays an important role in enabling the public to use notes and coins as they choose. 

Although cash use is declining, many people still prefer cash. Our July 2022 survey found that around one in five respondents consider cash to be their preferred payment method, and so use it day to day. We are committed to supporting cash as a viable means of payment.

How does the UK cash cycle work?

A diagram showing how the UK cash distribution system operates.

The Bank of England and Note Circulation Scheme (NCS) members are responsible for the UK's wholesale cash distribution infrastructure.

De La Rue, the Bank’s contracted printer, produces Bank of England banknotes.

Bank of England cash centres store new notes, and process and destroy unfit returns.

When required, notes are collected by a member of the (NCS) from a Bank of England cash centre.

Notes are then held at NCS centres and withdrawn when needed to meet customer demand. NCS members supply operators of ATMs, Bank and Post Office branches, retailers and foreign exchange companies. In the UK, most cash enters circulation via ATMs.

The public (the UK population, as well as international persons) use banknotes either to i) pay for goods and services, ii) deposit them into a financial institution or iii) retain them for an extended period as a store of value.

Retailers and bank branches deposit cash takings by transporting their notes via a Cash in Transit provider to their NCS Member. NCS members reconcile and sort the notes, reissuing fit notes and returning old/unfit banknotes back to the Bank for destruction (to be replaced with new).

Note the Royal Mint, on behalf of HM Treasury, issues UK coin to the NCS members under separate arrangements. However, the Bank of England’s upcoming legislative powers (see below) will apply to both the wholesale distribution of banknotes and coin. 

Latest updates on our work to support wholesale cash distribution

Bank of England Codes of Practice for wholesale cash distribution market oversight

On 24 April 2024, the Bank published the Codes of Practice for market oversight. The codes of practice provide transparency on the minimum standards of conduct and practice that recognised firms must meet. The proposed codes of practice are outcomes-based and are intended to enable an effective, resilient, and sustainable wholesale cash infrastructure. To support recognised firms in meeting the requirements set out in the codes of practice, a data catalogue, reporting form, and guidance have also been published.

What work has been completed to date to support wholesale cash distribution?

24 April 2024

28 March 2024

The Bank of England published its consultation on the approach to enforcement for market oversight of wholesale cash distribution recognised firms.

30 November 2023

The Bank of England published its consultation on the Codes of Practice for wholesale cash distribution market oversight. The proposed Codes of Practice are outcomes-based and are intended to enable an effective, resilient, and sustainable wholesale cash infrastructure. To support recognised firms in meeting the requirements set out in the Codes of Practice, a data catalogue, reporting form, and guidance have also been published.

18 August 2023

The Bank of England published its statement of policy on the Bank’s supervisory approach to market oversight for wholesale cash distribution.

We also published the responses to the consultation on the Bank of England’s supervisory approach to wholesale cash distribution, which ran from December 2022 until February 2023.

29 June 2023

The Financial Services and Markets Bill was passed by Parliament. Under a new Part 5A of the Banking Act 2009, as introduced through the Financial Services and Markets Act 2023, the Bank received new market and prudential oversight powers over the UK wholesale cash distribution market.

14 December 2022

The Bank of England published its consultation on its supervisory approach to wholesale cash distribution. The consultation paper sets out proposals for how we intend to implement its new powers in respect of the wholesale cash distribution infrastructure in the UK.

20 July 2022

HM Treasury introduced legislation to parliament as part of the Financial Services & Markets Bill that will provide the Bank of England with the necessary supervisory powers to ensure the wholesale cash distribution market remains effective, resilient and sustainable in the future. 

26 April 2022

HM Treasury published a policy statement setting out the Government’s intention to provide the Bank of England with statutory powers to oversee the wholesale cash distribution market.

Q1 2022

As outlined in the December 2021 public update, the UK banks that fund or participate in the wholesale infrastructure, alongside the UK wholesale cash operators, agreed individual commitments with the Bank of England that they will continue to support the provision of wholesale cash services. Firms provide information and data to the Bank of England on a voluntary basis to help demonstrate that these commitments are being met. 

December 2021

The WDSG published a public update, outlining industry’s decision not to proceed with a utility but, instead, to agree industry-wide and individual firm actions to support the UK cash infrastructure. Responses to the public consultation paper were also published. See a full record of the Minutes of WDSG meetings.

May 2021 - December 2021

An updated WDSG terms of reference was agreed, and a detailed business case for the utility model was developed.

H2 2020

Independent industry analysis commissioned by the WDSG proposed a consolidated ‘utility’ model - a privately-owned legal entity with its own governance structures as the single operator of the UK’s wholesale cash distribution infrastructure.

June 2020

WDSG published a Public Consultation Paper to invite feedback from the wider cash stakeholder community on its initial analysis.

May 2019

The Bank of England convened relevant stakeholders under the Wholesale Distribution Steering Group (WDSG) to ensure that the Wholesale Cash Distribution model for the UK remains resilient, effective, and sustainable in an environment of declining cash volumes. WDSG membership included organisations that currently participate in the wholesale cash supply chain in the UK. The WDSG agreed success criteria against which potential future cash distribution models would be assessed and explored various options. 
This page was last updated 24 April 2024