Scotland could become a global leader in financial innovation, according to a new report by New Economics Foundation (NEF).

NEF proposes a new digital currency and payment system for the country which, it claims, would help stimulate local economies, create a level playing field for small businesses, and support social justice for all its citizens.

Duncan McCann, Researcher in Economy and Finance at NEF, said: “Last year’s independence referendum kick-started an important debate on Scotland’s relationship with sterling. But in fact, even under devolution, Holyrood has the power to transform Scotland’s monetary system.”

“Scotland is in a unique position to take full advantage of current trends in digital financial innovation. A new currency and payment system like ScotPound would operate alongside pounds sterling, supporting small and medium businesses and putting money in the pockets of those currently excluded by the financial sector.”

This report outlines the creation of a new national digital currency, ScotPound, and free-at-point-of-use payment system, ScotPay, for Scotland. The proposals draw on over two decades of research into top-down reform of existing national currency systems and bottom-up local and complementary currencies.

The new Scottish currency would be non-convertible and purely digital, operated through an arm’s length public enterprise – BancaAlba.