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Wednesday, 19 February 2014

Scotland can unofficially dollarize using the Pound - without London´s consent

According to Forbes:

"In an almost unheard of outbreak of unanimity, the three major political parties in London – the Conservatives, Labor, and the Liberal Democrats – last week concurred in saying that the U.K. would not allow an independent Scotland to use the pound."

Scotland - or any country in the world, for that matter - can unilaterally adopt the British Pound, or any other country´s currency, as its currency. It is called unofficial dollarization. 

No-one can stop a country from using another country´s currency. Many small economies (island-state economies) are unofficially dollarized using the US Dollar as the national currency.

Zimbabwe uses the British Pound as one of the several currencies it uses in its multi-currency dollarization of its economy.

The fact that the Zimbabwean population refused to accept the Zimbabwean Dollar as payment towards November 2008, means that Zimbabwe dollarized spontaneously. The people decided: not the government. 

When Zimbabwe then officially withdrew the Zimbabwean Dollar from circulation as from 20 November 2008, it then unofficially dollarized the Zimbabwean economy allowing the official use of the US Dollar, British Pound, SA Rand, Euro and Botswana Pula. 

Zimbabwe did not ask permission from the US, UK, EU, SA or Botswana. The Zimbabwean government just decided by themselves to follow the Zimbabwean population´s lead.

Nicolaas Smith Copyright (c) 2005-2014 Nicolaas J Smith. All rights reserved. No reproduction without permission.