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Scottish Currency Options post-Brexit (2016)

Overview

By Dr Craig Dalzell.

Key points:

• Countries rarely have full control over all aspects of currency management simultaneously. Compromises must often be made, though different countries arrive at different solutions to those compromises.

• Setting up a new currency, if an independent Scotland chooses to do so, will involve planning but the steps involved are well understood and opportunities arise for public involvement in some of them, particularly design of new notes and coins.

• Currency options discussed include a formal currency union with either Sterling or the Eurozone; Unilateral use of either currency; or a new Scottish currency, dubbed the £Scot, managed under various options of fixed, flexible or floated pegs.

• Whilst, economically, no single option is likely to be significantly better or worse than any other — merely different — the political weight tends towards the recommendation of a newly independent Scotland adopting an independent £Scot, initially pegged to Sterling but with the option of moving, changing or floating the peg as and when required or desired

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