The Research Director of the Adam Smith Institute, Sam Bowman, wrote an op-ed for Conservative Home. He argued that if Scotland were to become independent, it should keep using the pound, with or without permission from Westminster.
In practical terms, there’s virtually nothing stopping any country in the world from using any other country’s currency as its own. Indeed, some countries already do this – notably, the ‘dollarized’ economies of Panama, Ecuador and El Salvador.
So Scotland could keep using the pound with or without a currency union. The difference would be that a ‘currency union’ would force the Bank of England to consider Scottish interests when making decisions about things like setting interest rates, and – crucially – acting as a lender of last resort to Scottish banks, lending to them when they were illiquid.
Read the op-ed here.