All things considered, an independent Scotland would be best served by issuing its own national currency from the outset, empowering the National Bank of Scotland to set interest rates according to domestic economic conditions. By allowing for exchange-rate flexibility, this approach would also enable the central bank to avoid the twin hazards that arise in a currency union: undervaluation, which produces inflationary pressure, and overvaluation, which demands wrenching internal devaluations (driving down real wages).