How easily could an independent Scotland set up its own currency?

Currency is a topic often debated when considering Scottish independence. This article does not discuss what currency option would be best but instead considers the experience of other nations creating a new currency. Therefore, we answer the questions many undecided voters have: Would Scotland be able to create its own currency? How difficult would that be? And would this cause economic instability?

In this article, we will present several mini case studies to highlight the positives of adopting a new currency and will provide examples of recently independent countries that have created and launched their own currency both quickly and effectively.:

Case Studies


These mini case studies demonstrate new currencies being created and launched quickly and effectively, even under far more difficult circumstances than would be the case with Scotland leaving the UK amidst Brexit chaos.  Establishing a central bank (to manage the new currency) is a task that many other countries have managed successfully and sometimes even before they are fully independent.

Therefore, if we consider the case of Scotland, which has not recently experienced war or faced the levels of inflation that Croatia did, for example, the idea of launching a new currency seems far less daunting even before considering the payback of gaining full control over monetary policy. In fact, as in the case of Estonia, it may actually lead to drastically improved financial circumstances and greater stability.

None of the nations mentioned throughout this article worried about the cost of introducing a new currency, as it was clear that the benefits of full monetary policy control would outweigh the costs. Moreover, when a new currency is introduced, the government has the option to simply create enough of the new currency to cover such costs. Both Estonia and Slovakia now use the Euro, having decided that, as developing nations, being closer to the EU would benefit them. However, that is a decision that both countries chose to make, and as we have previously explained, Scotland would not be forced to use the Euro, even if it decided to rejoin the EU as an independent nation.

Therefore, the issues surrounding the creation of a new Scottish currency should not act as an obstacle for independence. The timing of implementing a new currency would be when it worked best for Scotland and that would be dependent on the prevailing political and economic circumstances and the trade agreement with the rest of the UK post-independence. Indeed, if launching a new currency in Scotland were to unfold similarly to other countries that have also created their own currency, an independent Scotland will be likely to experience stability, and greater financial benefits, allowing for fully monetary policy control and flexibility that we do not enjoy as part of the UK.