Last week the New Economics Foundation (NEF) released an interesting proposition - the ScotPound. Given the Scottish referendum question has been put to bed, for now, you'd be forgiven for thinking why bring up the prospect of an independent currency for Scotland? But nationalistic questions aside, it is indeed an interesting prospect.
I have been clear that I think what has held digital currency back so far has been ambition in scope. People, understandably, regard 'cryptocurrencies' as the reserve of desk bound technophiles, when in fact the opportunity offered by them is quite the reverse. Digital currency, traded by communities, could literally put money in the peoples' hands.
Digital currencies to date have, by their very nature, existed outside of the status quo banking system. So what might it mean if a government, large or small, started issuing them? The NEF propose ScotPound would be created alongside a free-at-point-of-use payment system, aka ScotPay. ScotPound would be non-convertible and purely digital, operated through an arm's length public enterprise.
In theory, to get the ball rolling, the Scottish government would create instant liquidity by giving citizens a 250 ScotPound (S£) dividend. Then ScotPay would provide a publicly owned not-for-profit national payment system, enabling Scottish businesses to accept payment for goods and services without being charged fees by banks and global credit card firms, much as how our LEO Cafes and LEO Marketplace accept LEOcoin now. This would instantly mean people would start 'shopping local' ploughing money straight back into their community.
The NEF argue that the project would demonstrate that a new national currency can be created and implemented; that the programme would improve understanding about how money works and its potential uses. I agree, and indeed one of the original founding principles behind LEOcoin was as an educational tool for educating our entrepreneurs in business skills, only the coin has now become a reality.
ScotPound would instantly make Scotland a world leader in financial innovation. What a laudable ambition. For it is ambition that will make digital currency credible. A ScotPound in Scotland, a HullCoin in Hull, all are vivid demonstrations that people are willing to think outside the box when it comes to fuelling the engine of commerce. If we can show that it works for local communities, we can show that it works for international trading, which is exactly what LEOcoin is trying to do.
LEOcoin is already leading the way in demonstrating how a secure, internationally tradable currency, existing outside the financial status quo, can galvanise the SME sector. I see no reason why it cannot radically change the way governments do business too. Once the dam is breached we'll likely look back and wonder how we used to do finance any other way.