The Lake District Pound is to fold next year after becoming an “early casualty” of the rapid rise of contactless and mobile payments.

Founder, Ken Royall, confirmed that the colourful currency (LD£) designed to support independent businesses across the county will come to an end on January 31, when the notes issued in 2019 officially expire.

Since its high-profile launch in May 2018, more than LD£220,000 has been put into circulation, with more than 350 businesses, organisations and major attractions across the county adopting the currency.

Traders are being reassured that 2019 LD£s in circulation continue to be fully backed by Sterling and can be exchanged back at any time before the January cut off point.

And members of the public have been urged to spend their remaining LD£s before the date, when the notes will become worthless as a currency.

The Lake District Pound project will, however, live on, albeit it on a smaller scale, with souvenir sales continuing and being picked up by the Lake District Foundation charity.

Mr Royall said closing the LD£ currency had been a “very difficult decision”.

“Despite excellent support and widespread awareness of the initiative, the volume of LD£ in circulation has steadily been declining this year such that the level of LD£ now being retained is below the amount needed to support a self-sustaining operation,” he said.

“A full analysis of the reasons for the reducing circulation clearly shows that contactless, mobile and even wearable payments are replacing paper currency at an unexpected and unprecedented rate.

“In response, the project has concluded that the world in which the company finds itself today is unlikely to be able to support the project’s business model in the long term.

“Sadly, we’re just a couple of years too late. Payment technology has moved ahead rapidly, and the use of cash is declining much faster than anyone predicted and the LD£ is unfortunately an early casualty of that global shift.”

Mr Royall also hailed the impact of the LD£’s short life on Cumbrian businesses and charities, with souvenir sales of the currency raising funds for the Cumbria Community Foundation as well as the Lake District Foundation.

“The project generated ongoing funds through people taking away LD£s as mementos, souvenirs and gifts or as collectors’ items and potential investments,” he said.

“The very profound impact of the initiative has been to highlight the importance and value of local businesses, to encourage local spending by residents and visitors alike and to bring local traders together within their communities.”

in-Cumbria understands that it was touch and go whether the currency would continue in 2019, but that the project’s board of directors decided to continue.

More than LD£90,000 went into circulation in its first year, with the figure increasing slightly in 2019. The 2019 LD£ notes were given fresh designs including well known Lake District figures mountaineer Sir Chris Bonington, and beloved children’s author Beatrix Potter.

The Crafty Baa pub in Windermere was among the businesses to adopt the LD£ on its launch.

Its owner, Vince Gregg, said he was disappointed, but unsurprised, that the currency would cease to be having taken just a few transactions using LD£s.

“I’m disappointed – I’m disappointed for the whole of the Lake District,” he said.

“I don’t think it really hit the ground running. I don’t think the marketing was right in terms of getting the word out there and making it available at places such as train stations, bus stations, tourist information centres.

“Many more smaller businesses could have adopted it.

“I think it could have been a success. I’m now left feeling how come it didn’t work.”

Mr Gregg did however, welcome the move by the Lake District Pound’s board, to keep it going as a charitable enterprise.

After January the Lake District Foundation will continue to sell LD£ gift sets, books and souvenir merchandise. A proportion of the proceeds will go to the charity, which works to preserve the Lake District’s natural habitats and wildlife.

“I think it was seen as a novelty, because we didn’t see many people actually spend it,” he added.

“It’s good to see they have decided to change the format and keep it going to some degree. Who knows – maybe it will come back again at some point?”

Sets of the 2018 and 2019 LD£ are still available as a keepsake, and potential investment, on the Lake District website.