Dr Thibault Laurentjoye has been commissioned by the Scottish Currency Group to undertake an 18-month project to research and develop a comprehensive currency plan and proposal for Scotland. This is an outline of what he intends to do.
CURRENCY is not just about money – it is about power, trust and the capacity to shape one’s own economic future. The work ahead is aimed at demystifying the technical aspects of independence planning and giving both policy makers and the public the tools they need to make informed choices.
Over the next 18 months, through reports, conferences, and public engagement, we hope to shift the debate away from binary choices and toward a more sophisticated understanding of what monetary sovereignty could mean for Scotland.
The goal is to ensure that if and when Scotland becomes independent, it will be prepared – with options, strategies, and a clear sense of what lies ahead.
Stage one: Scotland replication of the ‘Wales report’
THE first major milestone will be the Scottish Currency Group (SCG) conference in October, where we will present a Scotland-focused version of the “Wales report” – a study published in 2024 that examined currency options for an independent Wales.
That report challenged the view that Wales should make market trust a prerequisite for issuing a new currency – not that trust isn’t important but markets have whims, and the Greek precedent shows how being trapped without your own currency can turn out to be a pernicious situation.
Furthermore, the report sought to evade the binary opposition between sterlingisation (continued use of GBP without a formal agreement with the UK) versus a free-floating independent currency – by introducing intermediary strategies such as crawling regimes, multi-currency anchors, and managed float.
The Welsh case highlighted the presence of twin deficits – a fiscal deficit and a current account deficit – officially estimated at 15-20% of GDP which could be reduced to around 3% of GDP after removing items linked to UK membership, such as nuclear defence and public debt, a level seen as more manageable for a newly independent state.
The report also examined how currency choices interact with trade patterns, borrowing needs, and debt redenomination – highlighting in particular the importance of converting the types of liabilities that would be vulnerable to currency devaluation, such as mortgages, consumer and small business debts.
The conclusion was that a carefully implemented Welsh pound could provide greater policy flexibility and macroeconomic resilience than continued use of sterling or a rapid transition to the euro.
Some of these findings are more or less directly transferable to Scotland and provide an analytical framework that will guide the upcoming work.
This document will assess Scotland’s post-independence economic starting point and weigh the pros and cons of various currency options – sterlingisation, a Scottish currency, euro adoption, or hybrid solutions.
As with Wales, we’ll consider a phased implementation roadmap for a Scottish currency, emphasising digital-first infrastructure, reserve management and clear rules around exchange rate management.
However, Scotland’s larger economy, more diversified trade relationships, and existing policy debates around the Scottish Reserve Bank and fiscal commission will introduce unique considerations.
Stage two: Key macroeconomic estimates and specific policy recommendations
FOLLOWING the October 2025 report, the next phase will involve producing critical macroeconomic estimates – work that will form the foundation for the final report in October 2026. The two most crucial variables are:
1. Scottish fiscal balance estimates
Drawing inspiration from John Doyle’s recalculation of Welsh figures, we aim to provide an adjusted, politically relevant estimate of Scotland’s fiscal position.
This involves stripping out expenditures unlikely to continue post-independence (eg UK-wide institutions or defence commitments) and re-estimating revenues that might change due to sovereignty (eg corporation tax, resource royalties, or customs duties).
2. Current account estimates
This is perhaps the most critical variable. Estimates of Scotland’s net trade position diverge – goods trade balance is positive, but the incorporation of service exports (such as financial and academic services) complicates the matter, as do North Sea oil, and tourism – as well as the import of public goods currently taking place.
That would be stripped away while reassessing the fiscal balance of Scotland.
Furthermore, the current account must also consider net income from investments and transfers – areas where Scotland may diverge substantially from UK averages, especially so after independence.
A better understanding of the current account position of Scotland is essential for determining exchange rate regime options.
The final report will also feature associated policy recommendations, including fiscal and monetary, linked with the management of a newly established Scottish state.
Two events will act as important deadlines and opportunities for public engagement in the research:
1. The 250th Anniversary of the Wealth of Nations (March 2026)
As a symbolic milestone in the history of economic thought, this event will provide a platform to present interim findings on fiscal balance and current account estimates.
2. Scottish Parliament election (May 2026)
We intend to make available policy-relevant summaries and accessible visualisations of complex economic topics, including potential fiscal frameworks and trade-offs between different currency regimes.
All the components – replicated findings, adjusted estimates, public feedback – will be brought together in a final report, due October 2026. This will not simply recommend a preferred currency option - it will lay out:
- Detailed implementation pathways;
- Key institutional steps (including lender/market maker of last resort);
- Exchange rate management strategies;
- Scenarios for debt redenomination;
- Strategies to stabilise the current account and reduce vulnerability to shocks;
- Addressing the economic consequences of independence
The ultimate aim is to offer a credible, practical, and transparent set of recommendations for Scotland’s currency strategy post-independence.
Recognising that politics will always shape economic decisions, the report’s ambition is to ensure that when such decisions are made, they are grounded in the best available evidence and clearly understood trade-offs.
Dr Thibault Laurentjoye is Assistant Professor in Economics at Aalborg University Business School in Denmark. He holds a PhD from the School for Advanced Studies in Social Sciences (EHESS) in Paris.
His research focuses on international monetary economics, currency areas,exchange rate regimes and foreign exchange reserve management. He previously worked in the UK as an analyst from 2015-21 in the private and the non-profit sector.
