Currency

A Scottish Currency in an Independent Scotland

Olanna — Sat, 06 Nov 2021 18:55:18 +0000

A Scottish Currency in an Independent Scotland Olanna Sat, 11/06/2021 - 18:55

Author or Creator

Yes Southside Dr Tim Rideout

Prediction for potential Scottish currency after Independence.

Scottish salaries will be paid in Scottish Pound. There will be a Scottish State Pension. Scotland will no longer be attached to the Bank of England. Scotland will have a Reserve Bank. Shops will trade in Scottish Pound. Zoom Video 1 Hour 30 mins.

Sources and Links

https://fb.watch/96rn2UkfKq/

Keywords

Currency

Pensions

Scottish Reserve Bank

The advantages of having our own foreign currency reserve

Stephen Richard — Thu, 28 Oct 2021 14:22:30 +0000

The advantages of having our own foreign currency reserve Stephen Richard Thu, 10/28/2021 - 15:22

Author or Creator

Common Weal

What is a Foreign Currency Reserve and why do we need one?

What is a Foreign Currency Reserve?

A Foreign Currency Reserve is basically financial savings a nation holds in the currency of other nation (mainly major currencies like the Dollar, Euro, Yen and Yuan). It means that in a financial emergency a government can always buy things from abroad. But one of its most important uses is to manage the value of a domestic currency. If you want to push the value of your currency up you can buy up some of your own currency using another nation's currency and if you want to bring the value of your currency down you can sell your own currency and build up your reserve. You can also spend it if there is a domestic emergency and you can invest it and get interest from it.

How would you use it?

It entirely depends on the strategy you are taking to your currency. For example if you 'pegged' a currency to Sterling (kept them at the same value) you would need to use your reserve if your own currency increased or decreased in value. If you let your currency 'float' (rise and fall in value in relation to Sterling) you may want to smooth the natural increases and decreases. And you might want to affect your currency value for other policy reasons such as to encourage exports.

Doesn't this create risks?

Yes, if not used carefully. A speculative attack is when currency speculators think your currency has a current value 'wrong enough' to profit from it by 'betting against' the currency. They then try to destabilise your currency by doing the same thing you're doing – buying it or selling it and effectively betting on the outcome. But most speculative attacks fail either because they are successfully defended (the national government does the opposite of the speculator and the speculator gives up) or because the national government doesn't bother and lets the currency reach a new value (which may well be good for the economy if the currency is overvalued). But this isn't a risk in the early years of independence because speculators won't hold enough of the new Scottish currency to be able to mount an effective attack.

Is this the only option for managing the value of a currency?

No – that is the purpose of monetary policy as a whole and a foreign currency reserve is only a part of that. Interest rates are an example of another crucial tool.

So how much do we need and how do we get it?

If Scotland wanted to back a new currency and peg it to Sterling in the early years of independence then it would need a Foreign Currency Reserve of about £25 billion. About £15 billion of this would be inherited from the UK or come from other sources that don't 'cost' anything. The remaining £10 billion would be borrowed and added to the national debt. But this would actually work out about half a million pounds cheaper for Scotland than the current cost of maintaining the UK's currency reserve.

Keywords

Foreign Currency Reserves

Currency

How to start Scotland's own currency

Stephen Richard — Thu, 28 Oct 2021 14:12:25 +0000

How to start Scotland's own currency Stephen Richard Thu, 10/28/2021 - 15:12

Author or Creator

Common Weal

How would Scotland start its own currency?

Does an independent Scotland need its own currency?

Yes it does. To manage its own economy, secure its own domestic finances, to protect its banking sector, to be able to respond in the event of emergencies and if it seeks to join the EU, an independent Scotland will need to have its own currency. It might choose to join the Euro one day but until it does it will need the infrastructure of a proper money system in Scotland.

Is this really hard?

There is a lot that needs to be done but most of it is fairly routine. There are countries in Europe that have changed their currencies in the last few years and the processes are well known. But to get it right, while the steps are largely routine the importance of supporting the public and businesses to adapt to the new currency is crucial, especially with issues like pensions and mortgages.

So how do we start?

We need to set up a central bank to manage the currency. It then needs to go through a range of technical processes to create things like payment systems (like those use to transfer money to accounts), clearing systems (how banks send money to each other) and digital currency (this is how banks set up accounts in a new currency and people can exchange a Scottish currency into other countries' currencies). But there are existing international standards that are followed for almost all of this and none of it is usual.

How will new bank accounts be created?

There will be a transition to a new currency, probably about three years (as there was with the introduction of the Euro). This is the period when all the work gets done but it is also when households and businesses are helped to move to the new currency. All the big banks work in many currencies and so they are fully equipped to accommodate a new one (that is what the 'digital currency' at the central bank is for). Any bank with significant numbers of customers in Scotland will want to keep their customers' business and so will offer bank accounts in the Scottish currency. A small number of customers who have accounts with unusual banks with few customers in Scotland might potentially have to open a new account with a bank which offers Scottish accounts.

So what happens to bank customers' accounts?

Customers then have two options – they can either change their existing account over to the new currency or set up a new account. They will have to have a bank account in a Scottish currency at the end of the transition period (to pay taxes and get paid) but at what point over the three years they make the shift is up to them. Some will choose to keep two accounts, one in Sterling and one in the Scottish currency, particularly in situations where they want to keep a pension in Sterling or have other income from outside Scotland. Standing Orders will automatically be moved to the new currency for anyone who redenominates their existing account (shifting to the new currency). Direct Debits are 'taken' from the account by whoever is being paid so the transition will be dealt with at their end.

And what happens to mortgages?

This will depend on the nature of the mortgage. People with mortgages near the end of their repayment may just want to complete payments in Sterling. For those whose mortgages have longer to run most will want to convert to the Scottish currency, which again is straightforward for their lender. There is a legal requirement to allow people to move their mortgage so anyone who has a mortgage with a lender who refuses to convert the mortgage can simply move to a lender who will. There is one category of people who this may affect negatively – those with special mortgages such as fixed interest mortgages or where there are 'early redemption' charges. Here their lender could charge them for moving. As this is unfair, a sum to compensate them for the total cost of fees is included in the costings for how much it would take achieve independence.

And pensions?

The state pension is a separate issue. For private pensions there are two options – you can keep your pension in Sterling or you can move it to a pension fund in the Scottish currency. Indeed you can do a combination of both if you want. Scottish pension funds can redenominate from Sterling to the Scottish currency.

What about businesses?

Almost all big businesses already operate in different currencies so adapting to a new currency will be straightforward for them. Small businesses will fall into one of two categories – if they trade only in Scotland then they can convert their bank accounts and systems to the new currency. If they trade across the border with the rest of the UK they may want to set up a new Scottish bank account and keep both (which is what many companies in Ireland do, one in Sterling, one in Euros). Businesses will buy from other businesses as before. Smaller businesses may need support to take payments in Sterling if they don't have the systems to deal in two currencies (for example, if their website doesn't have multiple currency options).

What about notes and coins?

There are a small number of companies which print banknotes and mint coins and they would be commissioned to produce the Scottish notes and coins. It is very much worth holding a national competition to design the new money as there is a surprising degree of interest in what is actually on notes so it is good to keep the public involved. Introducing cash is the last thing you do so a switchover day must be set. Then just before switchover day the new money would be distributed to shops and banks and at midnight the new currency would be legal tender in the shops.

Is that everything?

No – there are other things than need to be done like adapting vending machines and producing a strategy for getting people used to the new currency, but that's the main things.

Keywords

Independent currency requirements

Stephen Richard — Wed, 27 Oct 2021 15:20:11 +0000

Independent currency requirements Stephen Richard Wed, 10/27/2021 - 16:20

Author or Creator

Common Weal

How would Scotland start its own currency?

Does an independent Scotland need its own currency?

Is this really hard?

There is a lot that needs to be done but most of it is fairly routine. There are countries in Europe that have changed their currencies in the last years and the processes are well known. But to get it right, while the steps are largely routine the importance of supporting the public and businesses to adapt to the new currency is crucial, especially with issues like pensions and mortgages.

So how do we start?

How will new bank accounts be created?

So what happens to bank customers' accounts?

And what happens to mortgages?

And pensions?

What about businesses?

What about notes and coins?

Keywords

Scottish Central Bank

Some advantages to Scottish independence

Stephen Richard — Tue, 19 Oct 2021 11:43:24 +0000

Some advantages to Scottish independence Stephen Richard Tue, 10/19/2021 - 12:43

Author or Creator

IndependentScotland.org

10 Reasons to support an Independent Scotland

1. Scotland should have the right for self-determination

2. Get the Government we choose

3. No more building Nuclear Weapons

4. Securing Oil Funds in North Sea

5. Scotland has the resources and finances

6. Believing in the creation of more jobs

7. Believing in the benefits for Scotland and yourself as individual

8. Believing in a more equal wages

9. Believing that Scotland and England have opposite Political and Social views

10. Understanding that NO may lead to changes for worse

Keywords

Currencies Scotland could use after Independence

MMCS — Thu, 09 Sep 2021 19:16:33 +0000

Currencies Scotland could use after Independence MMCS Thu, 09/09/2021 - 20:16

Author or Creator

Margaret McSeveney

Sources and Links

https://google.com

Yahoo Answers

Keywords

Currency

Would an independent Scotland have to use the Euro?

Stephen Richard — Thu, 04 Nov 2021 17:57:20 +0000

Would an independent Scotland have to use the Euro?

Primary Author or Creator

Believe in Scotland

Stephen Richard Thu, 11/04/2021 - 17:57

Category

Currency

Fast Facts

‘No. Scotland would not have to necessarily use the Euro.’

More details

It’s a regular question and relates to EU rules that are largely misunderstood, whether an independent Scotland would have to necessarily use the Euro as its currency. We say that the question is more about whether an independent Scotland would decide to adopt the Euro or not? We researched the facts and we found the following:

The Truth

The short answer is, ‘no Scotland would not have to necessarily use the Euro.’ In fact, if an independent Scotland decides to join the EU as a full member, then according to the process for joining as a new member, Scotland would have to commit to using the euro at some undefined point in the future.

The Facts

The Scottish Government’s current policy is to be an EU member.
It is technically impossible to join the euro if you do not have your own currency. Joining the euro involves joining the European Exchange Rate Mechanism and without a sovereign currency, you can’t do that.
In principle, all Member States that do not have an opt-out clause (i.e. the United Kingdom and Denmark) have committed to adopting the euro once they fulfil the necessary conditions. However, it is up to individual countries to calibrate their path towards the euro and no timetable is prescribed.
The Member States that joined the EU in 2004, 2007 and 2013, after the euro was launched, did not meet the conditions for entry to the euro area at the time of their accession. Therefore, their Treaties of Accession allow them time to make the necessary adjustments.
It is highly likely that an independent Scotland would continue to use the sterling as its currency, at least during a transitional period.
To use the euro you have to meet the necessary conditions set by the EU and Scotland doesn’t, not least because it neither has nor plans to launch its own sovereign currency immediately after becoming independent.
Scotland would be empowered by the EU to decide the timetable to meet the conditions and as quoted, no timetable is prescribed; Scotland could be on an indefinite path to adoption. There are several nations to whom this process already applies and the EU told them they did not qualify to use the euro; such as Bulgaria, Croatia, Czechia, Hungary, Poland, and Romania.

Conclusions

An independent Scotland does not need to use the euro as its currency under all circumstances.

Due to the use of sterling in the transition period, it is possible for Scotland to join the European Free Trade Association (EFTA), which includes Norway, Iceland, Switzerland and Liechtenstein, to have to access the single market and customs union. EFTA members are not required to join the euro, but they can if they wish to become full members of the EU.
If independent Scotland joins the EU as a full member state the EU will agree that it is not possible for Scotland to adopt the euro and will give the Scottish Government full control over the timescales to meet the criteria. The Scottish Government can therefore indefinitely avoid joining the euro. However, a future Scottish Government might decide to join the euro voluntarily.

Keywords

Language English

Busting the old Unionist anti-indy myths. Open minds on Scottish independence #19

Stephen Richard — Sun, 10 Oct 2021 10:25:45 +0000

Busting the old Unionist anti-indy myths. Open minds on Scottish independence #19

Primary Author or Creator

The National

Stephen Richard Sun, 10/10/2021 - 11:25

Additional Author(s) / Creators

Believe in Scotland

Date Published

Sat, 04/17/2021 - 12:00

Category

Independence

Type of Resource

News Media

Fast Facts

This article looks at three myths about Scottish independence:

Myth 4: Business leaders are worried about the effects of independence.

Myth 5: A new Scottish currency would be difficult to establish

Myth 6: independence would threaten pensions

Resource Address (URL)

https://www.thenational.scot/news/19239891.open-minds-independence-18-busting-o…

Keywords

Business

Pensions

Currency

Language English

The SNP must rethink its economic model for an independent Scotland

Stephen Richard — Wed, 06 Oct 2021 08:45:14 +0000

The SNP must rethink its economic model for an independent Scotland

Primary Author or Creator

Laurie Macfarlane

Stephen Richard Wed, 10/06/2021 - 09:45

Additional Author(s) / Creators

Open Democracy

Date Published

Tue, 10/27/2020 - 12:00

Category

Economy

Currency

Type of Resource

Assessment report

Fast Facts

A critique of the Growth Commission's report. "Far from being an asset to the independence cause, the Growth Commission is its biggest liability. It’s time, as we say, ‘tae think again’."

Resource Address (URL)

https://www.opendemocracy.net/en/oureconomy/snp-must-rethink-its-economic-model…

Keywords

Language English

What are the arguments against Scottish independence?

Stephen Richard — Sun, 03 Oct 2021 22:26:59 +0000

What are the arguments against Scottish independence?

Primary Author or Creator

Jenna Macfarlane

Stephen Richard Sun, 10/03/2021 - 23:26

Additional Author(s) / Creators

National World

Date Published

Wed, 05/26/2021 - 12:00

Category

Independence

Type of Resource

News Item

Fast Facts

There’s a multitude of reasons why people aren’t in favour of independence. We take a look at them including the economy, borders, currency, whether there is real benefit to the union.

Resource Address (URL)

https://www.nationalworld.com/news/politics/what-are-the-arguments-against-scot…

Keywords

Language English