Santander Report Advocates for Bank-Issued Stablecoins Over CBDCs, Highlights Fraud as Key Payment Concern

Santander UK has published a comprehensive report on the future of payments in the UK, advocating for tokenized commercial bank deposits and bank-issued stablecoins as the most effective application of blockchain technology, while simultaneously highlighting widespread consumer concerns about payment fraud. The report, based on a February 2025 survey of 3,022 adults, 501 SME finance decision-makers, and in-depth interviews, reveals a landscape of crypto skepticism and a strong desire for enhanced security.

The data shows that 70% of consumers are satisfied with current payment systems, with only 20% expressing a desire for new payment offerings. Regarding cryptocurrencies, 63% of respondents stated they have no interest in using crypto for payments, and a majority (55%) had never heard of the digital pound (a potential UK CBDC). While 90% are aware of crypto, few claim a good understanding of the technology.

Fraud emerges as the dominant concern, with 52% of consumers citing it as their biggest worry when making payments, alongside the loss of funds. Santander argues that this necessitates future payments infrastructure to place fraud prevention at its core, including mechanisms to slow suspicious transactions.

In response to these findings, Santander explicitly recommends prioritizing tokenized bank deposits and regulated stablecoins over a retail Central Bank Digital Currency (CBDC). The bank expresses concern about disintermediation and a potential flight to non-bank deposits. The report outlines a 10-point plan for the UK's digital payments future, which includes designing fraud out of systems, renewing core infrastructure like Faster Payments, empowering regulators to drive innovation, and leveraging the established trust in banks.

Echoing the fraud concerns highlighted by Santander, Jonathan Frost, Director of Global Advisory for EMEA at cybersecurity firm BioCatch, commented on the survey. He stated that the UK's fraud controls remain "reactive rather than preventative," citing mandatory reimbursement rules that return funds but don't prevent the emotional damage to victims. Frost warned that without stemming the "flood of scams," consumer confidence cannot be achieved, making adoption of new payment methods like crypto unlikely.

Paul Horlock, Chief Payments Officer at Santander UK, emphasized the need for a pro-innovation regulatory stance and political backing for the UK to maintain global competitiveness in financial services.