On the ScotPound and Alternative Digital Currencies

On the ScotPound and Alternative Digital Currencies


“What is money?”
is a really interesting question. Over the course
of a thousand years since we’ve had many
different forms of money, almost anything has been used
as money, from large removable stones
on pacific islands through to seashells,
precious metals. In the modern incarnation, people mainly think of it
in terms of notes and coins, but really, most of our money now
is just data, it’s just ones and zeros sitting in
bank systems and payment systems that we move around. So, there are a number of problems
with the current dominant money systems, it is a systemically unstable system, with the IMF reporting over
400 currency-related crises in the last 40 years alone, affecting pretty much
every single country in the world. It also has problems in terms of
who gets to create it, with the present system almost
solely dominated by commercial banks, who create over 97% of the money
in our system. The problem with bank-created money is that it’s created at the point
of making a loan, which means that it requires people,
all businesses, government, to get into debt, in order for there
to be money in the system, and the flip side of this
money creation system is that when you
pay back your debt, you destroy that same money
that was created, so, this creates a perpetual need for
more and more people to go into debt to ensure that we have money
in our economy. So, when you hear politicians
and people in the media talk about the real solution we need
is for everybody to pay off their debt, what you can know for sure,
is that they have absolutely no understanding
of how the money system works. If we all did that, we would, basically,
have no money left in our economy. It’s a huge driver of inequality, so, with interests being due
on all the money that we borrow, and interest being paid on
all the money that we save, it in fact leads to a system
where the bottom 80% of earners are giving money to the top 10%
of earners on an on-going basis, which is kind-of perpetuating an
increase in the level of inequality in the UK. So, the ScotPound is a national,
complementary currency for Scotland that you would use to pay
for goods and services in the same way
as normal money, operated on a not-for-profit,
free at point of use, payment system with the idea of being for the
common good of Scotland. An alternative digital currency
changes the mechanism of money creation, so, rather than money being created
solely at the point of someone making a loan and
another person going into debt, what this money is, is created in the public interest
and given directly to people, so not the government,
neither business nor people, need to go into additional debt
to create this money. The second benefit of creating
a digital currency in Scotland would be that it allocates money
very differently. If you look at how banks, who have this huge power
to create new money, they don’t allocate this new money, or give out the new loans,
which is another way of saying it, based on public interest, or what the people care about
in some kind of democratic way, what they do is allocate it based on
where they can get the most profit, rather than going to put up asset prices,
or fund financial speculation, this would be going straight
into the hands of people, and those people, especially those
in the bottom segment of earners, would really go out and
spend that money immediately, which would lead to
real economic benefit. This can be contrasted with the Bank of England’s
quantitative easing programme, where they pushed in £375 billion
into the UK economy, and even their own research shows
that a disproportionate amount of that has really just gone to, again, push up asset prices and
benefit the top 1.5% of earners. There are loads of other kinds of
complementary currencies out there, which have proven their worth
at smaller scales. So, in the UK, we have the example
of the Bristol Pound, for instance, which is our largest local currency, but we shouldn’t forget that the Findhorn community
up in the north of Scotland started this revolution with
the Echo, back in 1996. The M-Pesa digital payment system
in Kenya, the Banco Palmas Network
of Local Banks in Brazil, the Chiemgauer in Germany, the WIR Franc in Switzerland
is an excellent example of a digital national currency which provides real countercyclical
economic effects, so when the Swiss Franc
is hard to acquire, or scarce within
the Swiss economy, Swiss businesses turn
to the WIR Franc in order to mitigate their inability
to get to the Swiss Francs, and it provides a real stabilising effect
for the Swiss economy. It is very important that people
take back the power to create money. All too often, people forget that in fact,
money is a human invention. We created the rules,
we created the parameters, so, we can change it. We just happen to have ended up
with this monetary system dominated by commercial banks, and it in fact served humanity well
throughout, you know, a couple of 100 years, but it’s really important for people now
to look at that money system and really see if it still meets
our needs and goals, and if you can look at it
and say that it doesn’t, then, you know, you should really join us in supporting
a move for currency innovation. What most energises me, and in fact, all of the
New Economics Foundation, is the excitement and energy
that’s up here in Scotland, and Scotland is truly uniquely placed
to be looking at this monetary innovation. In almost no other country
in the world is there this level of literacy
around currency, this level of interest, and this level of desire
to do something different, so I think it’s really important
for the people of Scotland to seize that energy
and make a positive change.

10 Comments

  • Fluffgar

    September 23, 2015

    If there's going to be an experiment or two testing this I think there are quite a few people/businesses that would be interested in getting involved.

    Reply
  • Stooshie Max

    September 23, 2015

    Digital currency may have its uses, and offer a level of convenience, but should only be supplemental to tangibly backed currency.
    State/Bank control of your wealth, with every transaction monitored ….. and no independent means of exchange. No thanks.
    Power cuts, flat batteries and system errors, or imposed limits at the flick of a switch. People will be left vulnerable.
    As it stands today, you are questioned about withdrawals if the bank deems it "beyond the norm". It is, after all, their money not yours.

    Reply
  • Ryuujin1024

    September 24, 2015

    At 2:00 Duncan states that 80% of earners are giving money to the top 10%. where is the other 10%?

    Reply
  • Stephen Horton

    September 24, 2015

    This is something that made me sad during the IndyRef — It was a perfect opportunity for MPs and organisers to explain things like fractional reserve banking and how the financial system we use really isn't the best system, and that how if we became independent it would be something that we could change. Instead we had talks about if Scotland could still use Sterling or if it should move to the Euro – two options which I believe are terrible, as it would prevent us from using tools like quantitative easing during a crisis (much like with what happened in Greece recently). The countries official currency could be one similar to ScotPound – but where the government and, therefore, the people, have control over the creation of new money, and can both ensure money is directed to places in the interest of the nation, and protect against its use for speculation on markets – something that can be good in the short run, but in a lot of cases ends up with, and is one of the main contributors to, financial crises. Hopefully next time we'll go more down this path – I think it could really benefit people, and give them some security when putting their mark in the right box.

    Reply
  • Richard Mcloughlin

    September 24, 2015

    How would digital money be backed and controlled, and what guarantee would be in place to allow me to use my money however I see fit

    Reply
  • GETSplus

    September 26, 2015

    Sorry to be a killjoy here and say after reading this Scot pound’s proposal it looks like is a funding exercise to get money from the Scottish Government for an organisation south of the border and not a very serious currency solution for Scots to debate.

    Believe me I’m all for creating complementary currencies but please don’t ask for the poor Tax Payers money to pay for it because they have already paid out millions for other projects that have little or no impact.

    The ScotPound is at least naïve at and a most irresponsible. There are so many issues they claim to cure which it does not and then to make comparisons the others currencies which are totally different types of currencies and bear no resemblance to the ScotPound model and then claim their success stories as fact which some of them are not.

    Creating a currency is the easy part. There are over 700 Crypto currencies similar to The ScotPound created in the last few years alone see http://coinmarketcap.com/all/views/all there is even one call “Scotcoin” which is a flop so far. http://scotcoin.org

    Anyone can create a currency and there has been hundreds if not thousands who have tried and most of them have come and gone and failed. Not because creating a complementary currency is a bad idea it’s not it is a great idea! But in the Case of the ScotPound it is poorly constructed and ill conceived.

    The hard part is getting people to accept your currency especially Businesses and believe me they are no fools. To me the ScotPound as currency is a none starter without the backing of the Scottish Businesses and they will work out very quickly that is worthless without contractual obligations of  businesses backing it and accepting it which I doubt they will.

    Back to the Tank and think again I'm afraid

    I could go on and on and on but that is enough for today

    Reply
  • mark nugent

    September 30, 2015

    loved this. shared it on facebook. i have to say though youtube isnt showing u have posted videos. maybe something to look at. missed a few as a result.

    Reply
  • Ja ck

    October 8, 2015

    So happy this isn't being dismissed as conspiracy theory anymore :')
    That pounds sterling is debt-based and money isn't inherently evil.
    Get yer fractional reserve tae!

    Reply
  • Tom Foyle

    October 11, 2015

    Such a currency is not only workable, but extremely desirable from the point of view of the average person. Unfortunately, those who control the money supply – the very few at the top end of that 10% – will NEVER allow such a system to be implemented. It would mean the gradual erosion not just of their comfortable lives, in which the average person is no more than a slave to their dictates, but would likely spread across the globe and eventually deny them their luxurious lifestyles derived from the sweat of billions permanently. To even ATTEMPT to introduce such a monetary system would put Scotland in a very dangerous place indeed.

    Reply
  • Pete Pimpernel

    June 5, 2018

    I think this is a fantastic thing for Scotland, as the so nicely put video stated. Where are the independence politicians? The independence voters? What's wrong with people? The Oslo Syndrome! Apathy will make you Scots remain just a British region. I'm born in England but really believe the Scottish can become a vibrant nation alongside its England neighbour and not needing to be dependent on it. #English4Yes

    Reply

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