If Scotland were to vote for independence in 2014, the choice of currency would affect much more than the notes and coins Scots would use in their everyday lives. The currency adopted by the newly independent state would shape its economy, influence its trading links and play a crucial role in determining how the financial markets view its prospects for growth and the sustainability of public spending.

There are a number of currency options available for an independent Scotland. These range from an agreement with the rest of the UK (rUK) to keep using the Pound Sterling in a formal monetary union, to the issue of a new Scottish currency that could either be tied at a fixed rate to another currency such as Sterling or the Euro, or freely floated on the foreign exchange markets. Each of these options brings its own set of potential risks and benefits. These choices are influenced by the degree of economic and trading integration between Scotland and rUK and are complicated further by the very high levels of debt that the UK has accrued since the financial crash of 2008, which means that a newly independent Scotland would start out with significant debts of its own. Finally, given that the idea of independence envisages a transition to an economy managed to achieve different political objectives to that of the rUK, any currency agreement made at the moment of independence would have to be periodically reviewed as the economies and political priorities of the two countries diverge.