Scotcoin, Bitcoin, ScotPound, a Scottish central bank?
Mure Dickie in the FT, writing from Glasgow, explains that currency policy became a central issue in Scotland’s 2014 independence referendum.
David Low, chairman of Lowdit Partners, a Glasgow entrepreneur, accountant and financial adviser, is withering about the financial system:
Why would anyone trust the banking system? The banking system is corrupt, the banking system hasn’t changed in 300 years, it’s still run by the elite. Every link in the banking chain from the central bank down, someone is taking a cut, someone is taking a margin, everyone is taking a clip.
The western economy is bankrupt, financed by the electronic printing of money, which Carney is using to buy debt off the people, the banks, the people who created the problem in the first place. It doesn’t filter down. It just circulates among the elite, it doesn’t filter down to the people who didn’t cause the problem, the people who are bearing the brunt of austerity. They are paying the price of the people who actually caused the problem.
And the people who caused the problem are solving the problem not with their own money but money given to them in newly-created electronic money by the Bank of England.
Mr Low decided to buy control of Scotcoin, which uses the public database ‘blockchain’ technology like the pioneer bitcoin, because he believes that as the use of digital money grows it will come under a regulator and those in the blockchain will have to register and be identified. Like other cryptocurrencies, it is based on a shared encrypted record of transactions, promising greater security and lower costs than traditional banking and settlement systems.
He dismisses the SNP plans to continue to use the pound and Bank of England after leaving the UK: “An independent Scotland, if it wants to have half a chance, must have its own currency,” he says. The FT article records various inducements to encourage people to take up the Scotcoin currency.
A 2015 report for the New Economics Foundation and Scotland’s Common Weal thinktank argued that adoption of a parallel digital currency exploring the creation of ScotPound, a new digital currency would help Scotland to address inequality and increase spending power.
The Scottish Monetary Reform group says leaving the UK would be an opportunity to set up a new Scottish central bank would have direct control of supplying new money, fixing interest and exchange rates, capping the national debt and reducing the influence of financial speculation.
After the 2008 global crisis had shaken confidence in the status quo, Scotland’s independence referendum further stimulated thoughts about adopting different monetary systems.