Scotland would become the world’s first cash-free country under plans being drawn up by the SNP for a post-independence currency.
The Scotsman has learned that First Minister Nicola Sturgeon will unveil the radical new policy at her party’s conference in Edinburgh later this month.
The use of cash has halved across the UK in the past ten years, with notes and coins now handed over in just three in every ten transactions, according to a study published in December by former financial ombudsman Natalie Ceeney. Cash use is forecast to halve again in the next decade as consumers increasingly turn to debit card use through contactless services such as Apple Pay on iPhones.
Under the SNP’s proposals, debit cards with contactless technology would be made available to every bank account holder in Scotland who does not already own one. The plan would also obviate the need to access the Royal Mint.
SNP leaders hope the plans will maintain party unity and provide a solution on currency the nationalists have struggled to find since before the independence referendum.
An SNP source told The Scotsman: “There is no doubt that currency has been an Achilles’ heel for the independence movement and there is a real danger the issue could split not just the SNP but the Yes campaign as a whole.”
In the run-up to the 2014 vote, former SNP leader Alex Salmond insisted an independent Scotland would be able to keep the pound and form a currency union with the UK.
But the then Chancellor, George Osborne, categorically ruled that out and the Yes campaign’s failure to come up with a credible “Plan B” was widely seen as a major factor in the referendum result. In May last year a long-awaited report by Ms Sturgeon’s Growth Commission set out plans to continue using sterling without being part of a currency union with the UK for the first five to ten years of independence, before the establishment of a new Scottish currency.
That plan was endorsed last month by SNP depute leader Keith Brown, who sought to reassure the party’s grassroots that the use of sterling would not be an “open-ended commitment”.
But the proposal has caused division within the party as many activists fear a delay in adopting a new Scottish currency would limit the ambitions of a newly-independent nation. Others point to the SNP’s stated goal of an independent Scotland joining the European Union, believing that accession would be more problematic without a commitment to adopting the euro.
The SNP source added: “It has become clear that a radical solution is called for – and this cash-free plan is exactly that.
“This is exactly the sort of bold and exciting concept a thriving independent Scotland can pioneer. We are a proud nation of innovators – from the television and the telephone to minimum pricing and the smoking ban.
“Anyone can see the days of cash are numbered, soon to go the way of vinyl and the printed word in a digital age of virtual possibilities.”
But a Scottish Labour spokeswoman dismissed the plan as an SNP “magic money tree”. She said: “This will do nothing to allay the wholly justified concerns voters have surrounding independence and currency. The SNP had no answers in 2014 and they have no answers now.”
Opal Frilo of the Scottish Conservatives said: “Who would be the lender of last resort? What reserves would our central bank have and how would we trade with other countries? This demonstrates a degree a macroeconomic illiteracy that is beyond lunacy and is in fact dangerous in a party of government.”