> It's worth pointing out that this scheme is not currently in place

This isn't strictly true. By law, electronic money institutions are required to safeguard customer funds. In the event of an insolvency, customer fund claims would be paid out in preference to all other creditor claims and there's various other safeguards to ensure people get their money back.

Specifically, Section 24 of Part 3 of the Electronic Money Regulations 2011 covers this:

-- 24.—(1) Subject to paragraph (2), where there is an insolvency event—

(a) the claims of electronic money holders are to be paid from the asset pool in priority to all other creditors; and

(b) until all the claims of electronic money holders have been paid, no right of set-off or security right may be exercised in respect of the asset pool except to the extent that the right of set-off relates to fees and expenses in relation to operating an account held in accordance with regulation 21(2)(a) or (b) or 22(1)(b).

(2) The claims referred to in paragraph (1)(a) shall not be subject to the priority of expenses of an insolvency proceeding except in respect of the costs of distributing the asset pool.

(3) An electronic money institution must maintain organisational arrangements sufficient to minimise the risk of the loss or diminution of relevant funds or relevant assets through fraud, misuse, negligence or poor administration. --

https://www.legislation.gov.uk/uksi/2011/99/part/3/crosshead...