Mother Jones: Could Bitcoin Become Scotland’s Official Currency?

[muh_roads]

http://www.motherjones.com/politics/...rrency-bitcoin

Could Bitcoin Become Scotland’s Official Currency?


A reliable medium of exchange is the biggest obstacle to Scottish independence. Enter the world's leading crypto-coinage.

—By Josh Harkinson
| Tue Sep. 16, 2014 6:10 AM EDT

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Antana/Flickr

With Thursday's Scottish independence referendum too close to call, opponents of an independent Scotland have been stressing the would-be country's lack of a reliable currency. An independent Scotland could either keep using the British pound and lose control of its monetary policy, join the eurozone's well-known squabbles, or create a new national currency that's almost certain to be weak. But there's an intriguing fourth option: adopting an online crypto-currency such as Bitcoin.

Scotland actually has some historical experience with this sort of thing: Instead of relying exclusively on the British pound in the 18th and 19th centuries, many Scottish banks issued their own currencies—a fact noted by Guy Debelle, the assistant governor of Australia's central bank, at a recent conference on digital currencies in London. Here's Debelle in the Guardian:

"The Scots can go back to experimenting with a multitude of currencies, Bitcoin and the like, and we can just sit back and see how it goes. A nice natural experiment about the future of money in Scotland—again. Because, as I said, they tried this in the 18th and 19th centuries. It worked for awhile, but eventually fell apart."

In the ensuing discussion, David Birch, the director of the digital currency consultancy Hyperion, argued that Scotland's currency experiment was more successful than one might think. From the Guardian:

"The economic research shows that in Scotland, the bank failures were fewer, and less disruptive, than the bank failures in England at the time," he said. "Competing note issue in Scotland didn't end because it collapsed: it ended because of an outrageous extension of the Bank Act of 1844, which extended the Bank of England's monopoly over note issue north of the border."

But ending the Bank of England's monopoly might not be the biggest problem with Bitcoin. A national Bitcoin-based currency would, practically speaking, resemble one based on gold: Bitcoins are designed to function as a limited commodity that becomes harder to acquire over time. In either case, the result is a highly inflexible national currency that often can't keep pace with economic growth. As Felix Martinpoints out in the New Statesman, one of the first people to identify this problem was a Scotsman: The economist John Law of Lauriston emigrated to France, became that country's minister of finance, and in 1719 replaced the gold standard with paper money printed at the discretion of the government.

No matter: Edinburgh-based venture capitalist Derek Nisbet recently launchedScotcoin, which is offering 1,000 free Scotcoins to every resident adult. "Our motivation is to empower the Scottish people with an alternative digital currency opportunity," he told the Guardian, "which may be used as a medium of exchange, should the need or wish arise."

For now, at least, it seems like Bitcoin's biggest use in Scotland is as a marketing gimmick. In May, the London electronics retailer CeX got a load of free press when it introduced Scotland's first Bitcoin ATM and briefly turned its Glasgow store into a "pound free zone": For a few days, it only accepted Bitcoin payments. "The trial is turning the Scottish High Street [location] into a Bitcoin laboratory," a CeX spokesman told the website CoinDesk, "highlighting alternative forms of currency should Scotland vote 'yes' in the forthcoming referendum."

[muh_roads]

Keep an eye on what is going on in Scotland. Media is running scared cause the vote was a "50-50 split".

http://fortune.com/2014/09/17/scotland-uk-independence/

[muh_roads]

This is getting interesting over there. Explains the price hiccup.

Scotland seems loaded with very intelligent people. I had no idea the Lieutenant Governor on the Isle of Man was so open to Bitcoin businesses.

The Revolution Will Not Be Televised.

http://www.coindesk.com/banking-crac...in-conference/

Banking Crackdown Dominates Day One of Isle of Man Bitcoin Conference
Joon Ian Wong (@joonian) | Published on September 17, 2014 at 22:10 BST


Crypto Valley Summit, a two-day conference aimed at launching the Isle of Man as a prime location for bitcoin businesses, kicked off today in the wake of news that threatened to undermine its central goal.
Just one day before the conference of more than 200 attendees began, a firm providing banking facilities to bitcoin businesses on the island announced it would close those accounts under pressure from its partner banks.
Still, the event was opened resiliently by the Isle of Man’s Lieutenant Governor,Adam Wood, who extolled the island’s ability to take advantage of a rising interest in digital currencies.
Wood said:

“The rapid development of digital currencies is leaving legislators and regulators playing catch-up. This is where the Isle of Man’s small size works to its advantage. It’s agile and we can make an appropriate response in record time.”

Banking woes


A panel on banking garnered the most attention, as R Paul Davis, the most visible digital currency proponent on the island, decried the banks’ decision to cut ties with domestic bitcoin businesses.
Davis addressed the crowd and this most recent news head on, saying:

“HSBC closed CTS’ corporate accounts because it objected to bitcoin transactions flowing through it.”

Davis went on to state that banks like Barclays were invited to speak at the event, but demurred following “national discussions”. Davis also announced that a merchant services firm based in the US called Instabill would pick up the slack from CTS’ account closures.
He added:

“[Instabill] would be able to fairly quickly replace everything CTS is offering with the exception of UK Faster Payments. I have warned [Instabill] that his only real danger is being killed in the rush.”

Davis also offered his predictions on which banks would recognise the opportunity in digital currencies, and which would fall behind, asserting that Spanish megabankSantander would be first to capitalise on cryptocurrency given its exposure to Latin American markets where remittances and online payments are in demand.
He said banks like HSBC and Barclays, which have faced recent sanctions from regulators, would be last.
Regulatory issues

The regulatory panel, which included David Hodgson, deputy director for authorisations at the island’s financial regulator, the Financial Supervision Commission, was largely positive on the development of digital currencies on the island.
“My view is that where the Isle of Man government has decided to place itself, bringing in the AML [anti-money laundering] regulations is appropriate,” Hodgson said, referring to the island’s requirement that digital currency firms have to register with the FSC for AML oversight.
John Spellman, the island’s director of financial services, likened digital currencies at present to earlier payment systems, which met with initial resistance before widespread adoption.
Drawing comparison to debit cards, Spellman said:

“The idea of validating yourself with a PIN was bizarre. I see digital currencies as being in the same place.”

Gaming and crowdfunding

Simon Dixon, of Bank to the Future, talked up the Isle of Man’s potential to become a prime location for bitcoin firms on a panel he shared with Max Keiser, host of the television programme The Keiser Report.
Dixon threw jabs at London and rival offshore jurisdiction Jersey:

“This is the ideal jurisdiction to disrupt the [banking] market. The jurisdiction that will win is not London [...] despite the fact that Jersey reactionarily came along after the Isle of Man, it is a banking island, I think there will be a lot of politics involved with a new form of finance.”

The Isle of Man is has a large online gambling industry, comprising about 10% of its gross domestic product. Firms like online poker giant, Pokerstars, are based on the island. Panellists on the session on gaming and cryptocurrencies welcomed the greater adoption of digital currency globally, with one panellist noting that cryptocurrencies could potentially offer greater profit margins to gaming operators.
On the sidelines, investor Brock Pierce, who is a co-founder of Isle of Man-based GoCoin, was effusive in his praise for the event.
Pierce’s remarks captured the optimism of the event:

“It’s so refreshing hearing from government officials and regulators who are positive about digital currencies. The Isle of Man is the centre of the bitcoin universe now.”

Featured image of Isle of Man Lieutenant Governor Adam Wood via Crypto Valley Summit

[fr33]

No, a potentially more socialist state than the one they might secede from will not embrace bitcoin to the point it becomes their national currency.

[Shane Harris]

No, a potentially more socialist state than the one they might secede from will not embrace bitcoin to the point it becomes their national currency.

Clearly. Although it would be in their best interest to use silver, gold, bitcoin, salt, or anything other than FIAT, that of course will not be happening this side of the global collapse.

[PaulConventionWV]

Scotland is a liberal paradise, which is not a good thing.

[idiom]

If they use the pound, the lose control of their currency. If they use Bitcoin they lose control of their currency.

Article is retarded.