One of the debates that needs to happen before the Scottish independence vote is what Scottish currency our nation will be using after independence.
The New Scottish Currency
George Osborne the UK government Chancellor (finance minister) has declared total opposition to allowing Scotland to use the Pound sterling. SNP minsters say this is their preferred option for a Scottish Currency.
The EU Euro is having major problems. So I don’t think anyone in their right mind would be looking to sign up to use that currency anyway. I don’t really think that EU financial ministers would be happy to let in any other new members to the Euro currency they have enough problems to deal with at the moment.
So what is on the table for an Independent Scotland and its Scottish Currency.
Scotland currently is using its own currency notes.
For example the Bank of Scotland, the Royal Bank of Scotland and Clydesdale Bank all issue their own Scottish currency pound notes and have done for centuries. However current rules say these banks can only do that up to the limits of how much gold and money they have in the vaults of the Bank of England.
This Scottish money is readily accepted as legal tender throughout Scotland but not in England. Any Scot travelling in England will have had some difficulty buying goods. Try visiting some other countries and you will find the same problem. Presenting Scottish Currency in local shops means complete refusal. Or having accepting a far lower exchange rate for local currency.
I have even had difficulty in getting the self serve payment machines in B & Q a UK national DIY chain of stores to accept Clydesdale Bank notes.
It would perhaps simplify the transfer of currency if Scotland was to retain the pound sterling. whether officially supported by the UK government or not. (Panama still uses the USA dollar as its official currency without official support from the USA Federal Bank but that is not a serious suggestion for Scotland.)
Would Scotland be able to enter into a deal with the Bank of England to allow the new Scottish Currency to be Sterling. The official statement currently says that the Bank of England would be severely restricting Scottish government policies and would that give Scotland to make any decisions for itself after independence. As the Bank of England takes policy direction from the UK government I don’t think that if we take this option Scotland could be truly independent.
Introducing a new Scottish currency however would not be impossible. Look at the UK change over to decimal it happened but took some years planning and educating people on how it would work.
Look at the change over the French and all the other EU members went through when introducing the Euro currency. It happened and settled down relatively easy. The current problems are more to do individual countries having local financial problems rather than the problems of changing.
A lot of computer financial software would need to be re-written to cope with a new Scottish Currency that would time consuming.
Let’s look at what that would mean in terms of timing.
1. The Scottish government would need to agree what the currency would be called. Then announce publicly what that would be.
2. Programmers would need to found that understood how the company’s current software works.
3. Then modify the software to work with the new currency and exchange rates built in for both the initial changeover date and ongoing.
4. It would then need to be tested THOROUGHLY to make sure it works on the large scale needed when released to the public.
I personally don’t have the confidence in computer programmers to be able to be do this in the relatively short time between the vote and the first day of Scottish Independence.
Whatever currency we are going to be using discussions need to start happening officially very soon. The present attitude of the UK government is trying so hard to block Scots from knowing all the full facts about Scottish Currency issues until after the the Scottish Independence vote. Is the official policy acting against Scotland and its potential future?
See also the following related Scottish Independence articles.
Scottish Oil Why is Scotland the only country in modern times to find oil and end up poorer.
Scottish Independence Defence Policy and NATO Membership. How will Scotland defend itself and what if any role will it have in NATO?
Scotland Independence and the European Union. Will Scotland benefit from Membership of EU?
Do you agree that the transfer date needs to be extended? If so let us know below in the comments box.