While there’s a long history to the Scottish pound, or pound Scots, the currency met its end with the Act of Union 1707 when it was replaced by pound Sterling (although the pound Scots continued to be used through much of the 18th century). So what are these Scottish banknotes you’re holding? Read on for the difference between the Scottish and British pound!
Legal Tender vs Legal Currency
While technically there is no such thing as a Scottish pound at present, to understand the difference between Scottish and British banknotes, you need to first understand the concepts of legal tender and legal currency. Both legal currency and legal tender are forms of currency approved by the government.
However, while legal tender is legally valid for the payment of all debts (unless specifically stated otherwise), and thus all parties are essentially obligated to accept it, legal currency does not possess the same sense of obligation. Although legal currency is legally recognized for the payment of debts, the only party actually obligated to accept legal currency as payment is the issuer.
The Scottish pound vs the British pound
Confused yet? Let’s simplify it. The Bank of England is the central bank of the United Kingdom and issues pound Sterling banknotes and coins. This currency, issued by the Bank of England, is legal tender and must be accepted throughout the UK.
In England the only issuer of any form of currency is the Bank of England. The case is different in Scotland, where three retail banks exist (Bank of Scotland, Royal Bank of Scotland, and Clydesdale Bank), each one issuing its own banknotes. These banknotes are legal currency, meaning they can legally be used for the payment of debts, but the only party obliged to accept the notes is the bank that issued them.
Where Can You Spend Scottish pounds?
How does that work in practical terms? Scottish banknotes can legally be accepted as means of payment throughout the UK, but outside of Scotland, you may find businesses a little more reluctant to accept them. Heading on to England or somewhere else in the UK? You should be okay, but It’s probably best to play it safe and visit a bank to exchange your notes for Bank of England issue on the way!
So what is the difference between the Scottish and British pound? Well, unless we’re speaking in historical terms, there isn’t one. It’s the same currency, just different banknotes.
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