The currency would run in parallel with sterling and could not be used outside of Scotland
THE New Economics Foundation (NEF) and Common Weal have joint published a new report today (10 September): 'ScotPound: Digital Money for the Common Good'.
The report is a comprehensive proposal for a new digital currency for Scotland backed by the Scottish Government, ScotPound.
SPS250 would be issued to every Scottish citizen on the electoral register, adding PS15m to the money supply every year. This is a serious economic stimulus, especially for the most deprived, and without any increase in borrowing or personal debt. The money could then be spent in any business signed up to take ScotPounds, or to pay Scottish taxes.
The not-for-profit transaction system, ScotPay, would be entirely free, incentivising the use of the new currency for local businesses. The new payment system would run entirely in parallel with the existing sterling system, and couldn't be used anywhere except Scotland or exchanged for another currency by the issuer. It is estimated that it would cost PS3m to operate, and it's likely that money would be more than recouped by increases in VAT returns from greater economic activity.
Mobile phone devices would be used to pay for things with ScotPound, similar to that of the Brixton pound. This could make Scotland a world leader in the burgeoning fintech industry of financial innovation.
The ScotPound bank - BancaAlba - would carefully monitor the progress of the currency and after a year could increase the money supply, potentially using participatory budgeting methods to allocate money distribution in local communities.
The report proposes that political parties in Scotland commit to implementing or exploring the possibility of a new digital currency for Scotland being part of their manifestos for the 2016 Scottish Parliamentary elections.
To visit NEF's website go to neweconomics.org
Picture courtesy of NEF