The Key Ideas

#12 Create a parallel Scottish digital currency and not-for-profit payment system

Scotland would ideally be able to invest in the commons would be to use targeted quantitative easing (the effective 'printing of money' which in recent years has been used to hand many hundreds of millions of pounds to the big banks). Unfortunately Scotland has absolutely no powers in this area. However, it would be possible to create a parallel Scottish digital currency and do something similar with it.

This currency would be digital and act as a complement to the national currency, limited in its design to Scotland, pegged to sterling and with a payment system—ScotPay—without transaction costs. You would spend it using your mobile phone or another device, and it could be used to pay for tax bills or other public services. A six month campaign before launch would get a large number of retailers and small businesses also accepting it, who would be incentivised to use it for their own costs due to the free transaction mechanism, as well as paying for taxes like non-domestic rates with it. It would then be recycled into the economy by using it to fund modest pay rises in the public sector. Gradually it is hoped that the circulation of the currency through businesses, the public sector, and consumers would make it a vibrant stimulus to local services and businesses.

If Scotland created £1 billion pounds worth of digital currency that would mean that every citizen could be given £250 worth to spend—a national stimulus package which has been proven to help kick-start economic activity, particularly in local economies and among the poorest sections of society who tend to spend what they have rather than save.

The ScotPound central bank would carefully monitor the impact of ScotPound over the course of the first year, before making a decision of how (if at all) to put more ScotPounds into circulation (it would not be helpful if people became excessively over-reliant on the currency as a total of their income). In the second year, ScotPound stimulus could be approached in a more targeted way to the poorest sections of society, or it could be democratised by giving a set amount to communities to decide how to use it via participatory budgeting. Either way, this would inject a billion pounds into the Scottish economy and increase demand, without any increase in personal debt.