Over the coming months, Scotonomics will consult with monetary operations academics and finance professionals to build the knowledge base on a transition to a Scottish Currency after independence.

We will also refer to and cite the extensive literature on currency creation, currency operations, transitioning to a new currency, and establishing a new currency. We are fortunate that the literature is vast. We will also consult with the Scottish Currency Group and their new initiatives of a Monetary Research Institute and the commissioning of an academic, Dr Thibault Laurentjoye, Author of “Currency Options For An Independent Wales”, to look at “Options available for Scotland’s currency post-independence.”

We will also consider any pieces of work on a new Scottish currency from think tanks or academics. We will occasionally use Freedom of Information requests to the UK and Scottish Governments.

We will strive to make the content accessible to the general public while also ensuring it is technical enough to be of use to academics or policymakers, a challenging balancing act. We aim to fill the void between PhD dissertations, major academic studies, reports from Think Tanks, and debates on social media, threads on X, and pieces in general publications.

Scottish Currency Project. The Transition to a Scottish Currency

We support Scottish independence and believe that a Scottish currency is essential on the day of independence. We also believe that this is far from a straightforward process and will involve compromises, challenges and complexity for a newly independent State.

We will adopt a heterodox economic framework for our analysis and will state our assumptions where appropriate.

There are specific issues related to undertaking this work:

1. We are talking about a process with no specific timeline

It would be much easier if we knew that independence was going to happen in, say, 2028. But this is not the case. Independence may come quickly or be more than a decade away. The transition may also take between five and ten years, adding another layer of complication. Therefore, we must base all our assumptions on the information available to us today. This adds significantly to the complexity. This will very much make this a process of iteration.

2. We are operating without any guidance from the Scottish Government

As it is official party (SNP) policy to have a Scottish currency “as soon as practically possible after independence”, one would hope, and surely expect, that the Scottish Government would have completed significant work on the framework for an independent currency. However, there has been no substantive work on currency transition beyond the 2022 paper, Building a New Scotland, A stronger economy with independence. The paper is contradictory and offers a superficial analysis. We hope that we can conduct this work alongside work carried out by the Scottish Government and/or the SNP.

3. The unique position of a nation leaving a reserve currency

When Scotland gains independence, it will no longer use Sterling. It will be the first modern European nation to leave an established currency zone with a reserve currency status. This provides a challenge in finding appropriate examples. Although every nation is different, it would be useful for analysis if, for example, a nation had recently left the Eurozone. A more general note, this is hardly a unique position for researchers.

4. The ‘scarcity’ of resources and complexity 

Each one of the questions most people would ask about a new currency would be enough for a PhD candidate to consider or fill a 100-page report. The lack of resources, unless we are commissioned for a specific piece, ensures that there will always be simplification in our work. Rarely does a researcher have access to the resources they require, and we will do our best to resource our project.

Given the above, the posts must be considered ‘working papers’ and will be subject to alterations. However, we will strive to create the most detailed, well-researched and cited resource on a new Scottish currency.

Resourcing the research

This is a significant undertaking that requires considerable time and effort. We may commission academics or professionals for specific small pieces of work. If you would like to contribute to the work, you can make a one-off donation here. Or join our Patreon membership site. All of our work will be initially published on that forum.

The research will be carried out by William Thomson, who has an MSc in the Green Economy and an MEcon in Economics of Sustainability.