Which Currency for an Independent Scotland?
The Pound or The Euro?
Yesterday there was a lot of political positioning and maneuvering around the currency issue as the UK Chancellor, George Osborne, was supposedly going to rule out a currency union with Scotland, should it vote YES and go independent. Today there will be a debate in Westminster led by Ian Murray, shadow business minster, who was my MP in Edinburgh.
There will be some debate about whether or not the Bank of England should let Scotland use its currency, and how this might work, and what the ramifications will be, and if the Euro is an option or not. This will be debated by essentially a group of Luddites and un-entrepreneurs with not real understanding of the changes that the internet or the digital economy are bringing to our world, and how downright disruptive the Third Wave is going to be to every established institution as we know it, from education to currency and yes, even to government itself. These three dinosaurs have been slow to change or fall, but once that tipping point is reached, watch out.
The government types are convinced that the options are basically limited to some choice between the Pound and the Euro for a new Independent Scotland. What they don’t see is a tsunami coming across the sea of economics and technology that will knock the legs out from beneath the central banks and disrupt the realm of currency as we know it. Cryptocurrency is an unstoppable force and will change the world, probably for the better. We are just at the very beginning of the curve in technical currencies. Sure, there will be ups and downs and a lot of volatility that occurs here in the early stages of the adoption of this new technology. We are in innovator’s time, as anyone who has read Geoffrey Moore’s Crossing the Chasm will relate to at this point.
Soon it will not really be up to governments anymore which currency to use. It will be up to the people, and the forces of markets.
If you can’t beat them, join them.
Scotland’s independence possibility comes at an a unique time in history where a very powerful moment can be seized. Never before is a country so well positioned to create a new currency that could become the standard in the world. But even then it shouldn’t be centrally controlled.
How to Create the Scottish Community Currency in the New Era Post-Independence?
There are a range of possibilities on how to pursue a new cryptocurrency option. One idea is to call for bidders and proposals from technologists and entrepreneurs all over the world. There might just be a currency that is a good fit, such as Dodgecoin, or a new one yet to be created, especially for Scotland. An RFP would be created, and the proposals made publicly open for analysis and debate. In and of itself, this exercise would go far in educating the public not only on information technology, but also economics, and how currency relates to countries, banks and power. Once a proposal was decided upon, the entrepreneurial company would move forward to develop the new currency of Scotland. The new Community Cryptocurrency of Scotland, that is. But other competing cryptocurrencies should be encouraged as well, such as Bitcoin and Litecoin, and a host of others that currently exist or will be created in the future. And through Darwinist forces the most able will be widely adopted.
There are a range of currencies possible that could be backed up by more than just algorithms. One might make it as the supported Scottish community cryptocurrency. Such a currency might be backed up by a commodity, such as oil, water, or even land. A crazy idea, but maybe each unit is backed up by a piece of micro land which is associated to a micro deed. Americans will remember the small deeds of real land that were prize in Craker Jack boxes in the early days. When my friend jokingly said that a new Scottish currency could be “Scottish pebbles with smiley faces on them” I took him seriously 🙂 The point here is that there is immense room for creativity and innovation and currency. A new Scotland should embrace creativity and innovation in every aspect. It should celebrate and encourage the new, not the old. The Pound and the Euro are old. They are controlled by central banks that succumb to the political interests of the governments that support them, and the banks that control them, and not the people who prosper or suffer under their decisions.
Why do this soon after a win for independence? Because its going to happen anyway. Altcurrencies will eventually swell to overtake the established. Just as the internet enabled the disruption of many other industries and institutions as we knew them, it will lead to the the same in currency.
Central banks are basically just printing paper now, with nothing to back it up. The power of the central banks should be transferred to the people themselves. There are also a lot of arguments against cryptocurrency in terms of volatility. But this could work in Scotland’s favor, and a smart currency that is used the world over could replace the Dollar and the Euro and lead the country to wealth just by itself. The price of innovation and creativity, and striving for something truly ambitious that could change the world, is volatility. Risk should be embraced and not avoided.
Quite frankly, I don’t understand how the Scottish Nationalist Party can call for independence, and then request to stay with the Pound in a diminished English state. While I know the polls express such support for the pound (which is of course driven by fear), the failure here is the lack of vision. The people need a vision, and and deserve an education on currency itself. They don’t deserve to be left in the dust while the rest of the world rapidly adopts cryptocurrency as it crosses the chasm at some future point and makes its way into the early majority.
Besides volatility, there are other arguments the pundits might have against cryptocurrencies. One is that they are privately controlled, which is not true. They exist within peer-to-peer networks and there is not central control. Another is that one can only use them with smart phones or computers. Not true either. Cryptocurrencies can also be printed and used in paper form as well. So this is not an issue for the carrying of cash if one so desires. The elderly, for instance, can be expected to carry cash.
I am not the only one talking about this. Iceland is considering an altcoin as well, led by an entrepreneur without any official mandate.
Because currency is such an important issue for a state, and I believe is a huge opportunity for innovation in a newly independent Scotland, this will not be the last writing we do here at the Academic Entrepreneur on this subject. Keen currency policy should be at the heart of the independence movement and Scotland’s boat should catch the wave of disruption starting in this category and ride the tide up. Embrace the Imagination Economy.
If would like to learn more about electronic payments and the future, including Bitcoin, check out http://futureofpayments.ca/.