EDINBURGH – In the debate over Scottish independence, currency isn’t just an economic tool—it’s a political lever, a trust mechanism, and a statement of sovereignty.
As momentum builds behind renewed independence discussions, a critical question remains unresolved: What currency would an independent Scotland use, and how would it function in the real world?
Over the next 18 months, I will be working under commission from the Scottish Currency Group to answer that question through an in-depth, evidence-led research project. The goal is to deliver a credible, practical, and politically coherent roadmap for the creation of a new Scottish currency.
Why Currency Matters
Currency is often mischaracterized as a mere technical detail—something to be sorted after independence. But the truth is the opposite. Currency is foundational.
A country’s currency underpins its ability to:
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Conduct independent fiscal and monetary policy
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Build international trust in its economy
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React to crises with agility
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Finance public services sustainably
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Manage trade, investment, and employment strategically
Without control over its own currency, a nation cannot fully control its economic destiny.
Objectives of the Project
The work will culminate in a detailed proposal, but the process itself will be just as important. The report aims to:
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Establish the core principles of a Scottish monetary framework based on international precedent and economic best practice.
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Provide a clear pathway from the current situation (using the pound sterling) toward the implementation of a Scottish currency.
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Offer costed, realistic policy options that can be adapted depending on economic and political conditions at the point of independence.
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Address concerns about inflation, debt management, currency reserves, and international recognition.
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Build public trust through clarity, transparency, and engagement with stakeholders.
Key Questions to Be Answered
The project will focus on several high-stakes questions that remain underexplored in current political discourse:
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When and how should a Scottish currency be introduced?
Should it be immediate post-independence, or after a transition period using sterling? -
How will the Scottish Central Bank be designed and governed?
What mandates should it have—price stability, employment, financial stability? -
What exchange rate regime should Scotland adopt?
Floating, managed float, or pegged to a basket of currencies? -
How will confidence be built in the new currency?
Through legal tender laws, government credibility, macroeconomic stability, and institutional trust. -
What about debt and reserves?
How will Scotland accumulate the foreign currency reserves needed to support monetary operations and absorb shocks? -
What impact will currency have on trade and investment?
How will businesses price, hedge, and operate in the early years of monetary independence?
These questions are not merely technical—they are political, social, and symbolic.
Approach and Methodology
The research will be based on:
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Comparative case studies from other small advanced economies that have launched or reintroduced currencies (e.g., the Czech Republic, Slovakia, Estonia, and the Baltic states post-Soviet Union).
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Economic modeling to simulate different scenarios under various fiscal, monetary, and trade conditions.
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Stakeholder engagement including public sector officials, economists, business groups, trade unions, and civil society.
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Public consultation to ensure transparency, answer concerns, and build legitimacy.
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Legal analysis of the constitutional, institutional, and financial frameworks required to support the currency’s implementation.
The Political Context
The Scottish Government’s 2022 “Building a New Scotland” paper reaffirmed its intention to eventually establish a new Scottish currency after a period using the pound sterling. However, critics have long pointed to a lack of operational detail, especially concerning implementation timelines and transition risks.
Pro-independence groups are divided. Some argue for a faster transition to monetary sovereignty to avoid constraints imposed by a foreign central bank. Others are wary of currency volatility and push for longer-term sterlingisation.
This report aims to move the conversation beyond ideological trenches and toward credible, evidence-based decision-making.
A Currency for a Sovereign Scotland
This project is not about speculation. It is about creating a comprehensive, practical currency blueprint that can support a stable, sovereign, and prosperous Scottish economy.
The ultimate goal? To ensure that, come independence, Scotland is ready to act—not just react—with the financial tools, public backing, and institutional confidence required to steward its own currency successfully.
In the end, currency is not just about money. It is about power, trust, and the capacity to shape one’s own economic future.
