If, like me, you enjoy a bit of history, you may be familiar with the pastime of ‘mudlarking’. It is – quite literally – larking around in mud – combing riverbeds and shores for historical artefacts, like coins or jewellery, an activity that often takes place on the banks of the River Thames.

London has almost 2,000 years of history behind it so it’s no wonder the city has attracted eager history-buffs taking punts on the Thames’ shores, scaling the river at low tide, searching for unique portals into our past.

Amongst the hundreds of artefacts found, evidence of medieval commerce and ancient finance are among the most common. In fact, one recent treasure includes a Roman coin featuring Emperor Hadrian’s face that dates back to the Second Century AD.

Much has happened since the time of Emperor Hadrian. His wall on the Scottish border collapsed for one, the Roman settlement of ‘Londinium’ became London, and – more recently – the City of London has become one of the world’s leading financial hubs. Money as the Romans would have known it has also changed. While coins are of course still in circulation, recent developments suggest physical money is disappearing and it’s increasingly likely that we’re headed towards a cashless society.

This summer, a report predicted that cash will account for just 6% of payments within a decade, with 23 million people abandoning coin usage. And earlier this month, Mastercard research showed one in five Britons expect they won’t carry a physical wallet in the next five years. The UK government is also now laying the groundwork to develop a digital crypto-version of Sterling – dubbed Britcoin – as it seeks to match similar developments in other countries.

If developed, this Central Bank Digital Currency (CBDC) will be issued by the UK’s central bank, rather than by a commercial bank, and will also be a liability of that central bank and denominated in the sovereign currency, as is the case with physical banknotes and coins. In fact the Treasury is now advertising for a candidate to steer the government’s approach to the introduction of a CBDC.

Many reports express concern about such a prospect. There are fears that a cashless society could open the door for less privacy, with citizens having to expose more and more of their personal information online, or that a collective greater reliance on technology could pave the way for potential vulnerability to cyber attacks. There’s also a big worry that the financial inclusion gap could widen with those not digitally literate, or without a smartphone, left behind.

While these are very important factors to consider, there are also, of course, some benefits to going cashless – such as a potential reduction in crime and a greater ease in the everyday management of money for individuals and businesses, as the need to store, protect, withdraw and deposit physical money disappears.

It is therefore the responsibility of the UK government to not only understand and consider the potential concerns of its citizens regarding going cashless, but also to communicate the benefits and be transparent about what the future holds. Inclusive design is vital to ensuring nobody is left behind and that the financially excluded or more vulnerable in society are supported. And the government – with guidance from regulators and the central bank – should put in place strong regulations and – if needed – establish new bodies that ensure the rules are adhered to.

We can learn much from the widespread success of open banking, which just after five-years of PSD2, has surpassed over five million users in the UK. Now, major players in the open banking ecosystem are calling for its next stage: open finance. It’s hard to argue that this would have been possible without the central standards set by the Competition and Markets Authority or the Open Banking Implementation Entity (OBIE), which both played critical roles in creating industry guidelines to drive competition, innovation and transparency. Or without the fintechs which have played a crucial role in communicating the benefits in a human, jargon-free way.

I personally believe the roll out of CBDCs and a subsequent cashless society is inevitable. And in a couple of thousand years’ time this should have an impact on the pastimes of history-buffs. Will people still be mudlarking on the banks of the Thames to find forgotten money? Or will they be scouring the internet – or whatever the equivalent is then – mining for evidence first referencing the demise of cash, the creation of the first NFT, evidence of crypto’s extraordinary climb, and the ultimate rise of a cashless society?

|| By Alex Fry ||