Firstly, using the pound without establishing a formal agreement with the UK would leave Scotland in a position of having no influence over interest rates and exchange rates; also no Central Bank support.
Secondly, if a “Scottish pound” was pegged to the pound sterling, a Scottish central bank and foreign currency reserves would be required.
Thirdly, if it was decided to create a new Scottish currency, there would be enormous risks for the citizens of Scotland. Speculators would have a field day.
I am fairly certain the question of currency will be a key issue in the debate between Alex Salmond and Alistair Darling. Salmond will not be able to shrug it off as he is wont to do at First Minister’s Questions.
The only sensible route is to remain in the political and currency union of Great Britain and Northern Ireland. Not only will more powers be devolved to the Scottish Parliament and Welsh Assembly, but also to the English regions.