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Pound Confusion

May 13th, 2017
money, ideas

The Pound Sterling (GBP) is a peculiar currency union. There are English, Scottish, Northern Irish, Manx, Jersey, and Guernsey Pounds. And not only that, but the Scottish and Northern Irish pounds are issued by a total of seven commercial banks. So there are eleven different entities issuing GBP notes!

UK law requires that Scottish and Northern Irish banks keep a Bank of England note in their vaults for every one they print. On the other hand, the Manx, Jersey, and Guernsey Pounds are just issued by their respective governments. They hold their pounds pegged 1:1 by promising to exchange their notes for Bank of England notes.

Which leaves me with a bunch of questions:

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