A referendum on whether Scotland should be an independent country will take place tomorrow, Thursday, 18th September 2014. To pass, the independence proposal requires a simple majority of about 4 million voters. According to recent polls, it’s going to be a close call. What will happen to Scotland’s economy if the YES have their way, and what role might Bitcoin play?
Pound, Euro, or Bitcoin?
SNP leader Alex Salmond has insisted an independent Scotland could not be prevented from using the pound, but the National Institute of Economic and Social Research (NIESR) thinks Scotland would collapse within a year if it kept the pound and walked away from its share of the national debt.
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If Scotland can’t keep the pound, joining the euro might be an option. But the Spanish government has warned that an independent Scotland would be forced to wait at least five years to join the EU and would then have to sign up to the euro. Reading between the lines is easy: the Spanish government is scared that the independence of Scotland might create a precedent for the independence of Catalonia.
A referendum on the independence of Catalonia is planned for November 9, 2014, despite the strong opposition of the Spanish government. Other European Union nations also have strong political movements for local autonomy and independence, and are scared of a runaway push to break nation states up. So, negotiations for membership in the European Union and the euro system might run into significant opposition.
In the worst case scenario, Scotland won’t be able to keep the pound or join the euro, and will be forced to build their own currency. But that, of course, would take a long time. In the worst case scenario, the government wouldn’t be able to act fast enough and the citizens would be forced to take Scotland’s economy in their own hands.
Local Exchange Trade Systems (LETS) have been established in such cases, to protect local economies from collapse at times of strong instability of their parent economy. The citizens of Edinburgh, Glasgow, and smaller towns, might get organized and organize LETS, perhaps integrated in a Scotland-wide federation.
Proposals for Bitcoin-powered LETS have been raised from time to time on bitcointalk.org and other watering holes for Bitcoin enthusiasts. If Scotland becomes independent after the referendum on Thursday, it seems likely that similar proposals will gain momentum, find strong leadership and organization, and eventually be implemented. That would be the closest thing to official adoption of Bitcoin by a major nation, and a huge boost for Bitcoin.
Scotcoin to Empower the Scottish People
Scotcoin is a recently created local cryptocurrency for Scotland.
“There is so much uncertainty with the current financial situation, that introducing a voluntary cryptocurrency, which may in the future act as a medium of exchange for the Scottish people, can only benefit them should there be major disruption,”
says Edinburgh-based venture capitalist Derek Nisbet, the creator of Scotcoin.
“Our motivation is to empower the Scottish people with an alternative digital currency opportunity, which may be used as a medium of exchange, should the need or wish arise.”
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