Scottish Independence and Scotland's Future Scottish Innovation
Party (SIP) Finance
First I'd like to provide
three documents for you to read which come from the Chokka Blog which I
consider to be the very best information on Scotland's finances...
Scottish Currency Options post-Brexit
Common Weal report as at July 2016 By Dr. Craig Dalzell
It is widely acknowledged that one of the weaker aspects of the 2012-14
Scottish independence campaign was the debate around currency. The
strategy of adopting a Sterling union with the rest of the UK, even
after such a union had been publicly dismissed by the pro-Union
advocates, was deeply damaging in terms of both confidence in the
pro-independence campaign itself and in uncertainty about the future of
an independent Scotland.
In the wake of the 2016 EU referendum result, a second independence
campaign has been deemed “highly likely” to take place within the next
few years. It is vital then that the questions which the 2014 campaign
could not answer are addressed now, before the second campaign is
launched. This report seeks to take this opportunity to further the
currency debate by explaining the concepts required to fully understand
the details of the debate as well as laying out the options that an
independent Scotland could reasonably face.
Digital Currency for
Scotland, Backed by Scottish Parliament and Banks
Sep 09, 2016 by Giulio Prisco
Economists at Strathclyde University in Glasgow, Scotland, have warned
that Scotland’s financial sector needs to accelerate its adoption of
technology to avoid a future banking crisis. According to the
economists, adopting leading-edge fintech could create 15,000 jobs in
Scotland over 10 years and failing to do so would have the opposite
effect.
“Fintech is evolving at a rapid pace and the consequences of
digitalisation are being hailed as a ‘game changer’ for both the banking
and securities industries,” said Daniel Broby, director of the
Strathclyde University’s Centre for Financial Regulation and Innovation.
“Financial transactions are set to become instantaneous, traditional
paper money is being replaced by digital money and entrepreneurs will be
able to raise money directly from the public,” added Broby. “All this is
good news for the consumer. But it is critical that we create the right
conditions to enable companies to develop fintech faster, if Scotland’s
financial sector is to remain globally competitive. The technology
exists. Either Scottish financial institutions adopt it and thrive, or
they ignore it at their peril.”
The warning came at a symposium on the future of fintech held last
Friday, September 2, at the University of Strathclyde’s Technology and
Innovation Centre.
The Strathclyde economists are persuaded that fintech is being driven by
blockchain technology and distributed ledgers, two major innovations
poised to transform the way the financial sector handles not only
payments but also identity, transactions and debt information.
Broby argued that the adoption of advanced fintech should be
accelerated. “There’s potentially a huge opportunity for Scotland but we
need to seize it,” he said.
Broby and co-author Tatja Karkkainen presented a conference whitepaper
titled “Fintech in Scotland: Building a digital future for the financial
sector.”
The potential for a Scottish digital currency — a local currency backed
by the Scottish parliament and banks — is examined in Broby’s whitepaper
and it has been discussed at the symposium.
It’s worth noting that the possibility of a Scottish national digital
currency was also discussed in connection with the Scottish independence
referendum in September 2014. The referendum failed, but the possibility
of a new referendum surfaced again after the U.K. voters chose Brexit,
the exit of the U.K. from the European Union, on June 23. In fact,
Scottish voters chose to stay in the E.U. and Scottish politicians
declared that they would put the referendum back on the table. However,
Broby’s proposal could be implemented even if Scotland were to remain a
part of the U.K.
“We present the case for a Scottish backed crypto currency,” says Broby
in the whitepaper. “Most crypto currencies have been developed by the
private sector. Scotland could either host such an initiative or develop
its own. This could be done by providing the backbone in the form of an
encrypted distributed ledger. As a sponsored initiative, a copy of the
transactions could also be mirrored in a central registry. This could be
maintained by the Scottish government. The advantage of this is that
there remains an element of oversight, be it for tax or money
laundering. This would prove easier to regulate than a mined and
anonymous blockchain.
“The rationale for a Scottish digital currency is supported by its
unique political positioning,” continues Broby. “Legally, there is no
need to have the legal capacity to issue banknotes to set up a
cryptographically enabled transaction system. As long as a bank or group
of banks is willing to guarantee the exchange of the currency to
sterling (or a menu of exchangeable currencies) then the system could be
just run from a [distributed] ledger.In most countries it is only
central banks who are permitted to issue currency. In Scotland, Bank of
Scotland, Clydesdale Bank and The Royal Bank of Scotland currently issue
banknotes. Scottish Banknotes are legal currency in as much as they are
approved by the UK Parliament. Scottish banknotes are not technically
legal tender even in Scotland but the widespread use has established a
precedent which can be built on. The Scottish payment system currently
exists without a legal framework.”
“This legal ambiguity can be used to issue Scottish digital currency,
backed by deposits from these currencies with the Bank of England,”
concludes Broby. “The Scottish Parliament would have to support the
initiative and presumably pass legislation on [digital currencies] to
ensure its success.”
by Giulio Prisco
Giulio Prisco is a writer specialized in science, technology and
business. He is persuaded that Bitcoin and its underlying technology are
about to bring disruptive positive changes to finance, business, and
society.
Fintech Insights from
Frost & Sullivan
Edinburgh is acknowledged as the UK’s second largest financial hub and a
worthy challenger to London’s hegemony, according to a Frost and
Sullivan article. But what about fintech?
Fintech is thinking big in Scotland. Really big. Clustered around its
banks and financial companies, Scotland has world-class academic centres
of excellence, which provide expertise and resources in cyber security
and big data analytics.
The UK recognises it has a huge opportunity to lead innovation in the
global financial services sector. Economic activity in finance and
insurance contributed £1126.9 billion or 8% of Gross Value Add to its
economy in 2014.
However, sheer size and global influence are not enough: Many
traditional sources of profit are under threat from shrinking margins
and from new digital entrants with lower overheads. Core activities in
retail banking and insurance are being transformed by mobile payments,
online-only banks and crowd-sourced investment and credit.
To turn these threats into advantages, the sector is working to boost
its capacity to absorb new technologies. Scotland is opening up to
collaboration with external innovators as never before.
The Fantasy Economics behind the case for Scottish independence
By David Blake in Briefings for Britain (April 10th 2021)
Last week Professor Blake summarised the economic cost to Scotland of
becoming independent. In this article he lays out the case against
independence in more detail including the serious difficulties Scotland
will face in attempting to rejoin the EU.
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