ANGUS Brendan MacNeil MP claims that customers should quit RBS over its latest branch closure plan (‘Take your money out of RBS,’ urges Scottish MP, The National, January 12). The widely held believe that banks lend only the money in their vaults is a myth. Banks have a licence to create money out of nothing – at the mere stroke of a computer key!

RG Hawtrey's article, Money, in the Encyclopaedia Britannica (14th Edition, 1929, volume 15), says: ''Banks lend by creating credit; they create the means of payment out of nothing''. In 2014, the total UK money supply was £2.1 trillion – but 97 per cent of this had been created out of nothing by the banks as loans. Only three per cent, £62 billion, had been issued as legal tender in the form of Bank of England notes and Royal Mint coins. Almost without knowing it, we have transferred huge, unaccountable power to the private banks. Most of the money supply is controlled by 56 unelected individuals – the directors of the five major banks. These licences to create money ex nihilo should be revoked. Only the state should have the power to create money.

Banks are closing branches at an alarming rate. According to the British Retail Consortium, debit cards have now overtaken cash as the most popular form of payment in the UK. At present, credit card companies have the legal right to refuse anyone a card or to revoke an existing card without giving reasons. How would anyone function in a cashless society without a card? Should our entire financial system be in the hands of private companies?

Sweden is already well on the way to becoming a cashless society. What is here proposed is that Scotland becomes a truly cashless society – but that the replacement of cash (coins and notes), be entirely in the hands of the Scottish Government. In this system, everyone would be given a unique Scottish Post Office Cashless Account (''SPOCA'') – just as every Scottish resident at present has a unique National Insurance number.

The only money in your SPOCA would have been put there by you, or your employer or your pension provider or friends and relations. This account would garner no interest. The issuing and ownership and administration of SPOCA cards would be exactly as it is for Scottish cash at present. Think and treat a SPOCA in exactly the same way as currently you think and treat your purse or wallet. In fact, your SPOCA would be your purse or wallet! You would be provided with a SPOCA plastic card (or equivalent), which you would use to purchase anything that you can buy now with cash or credit or debit card.

Just as there is no going into the red with your wallet, so there would be no overdrawing of your SPOCA. Once it is empty, that's it – as with your wallet, replenishment is your responsibility. Cash in the form of coins and notes would, of course, completely disappear and be replaced by SPOCA cards. But, unlike using your current credit card, it would not cost you or a vendor a single penny on top of the cost of the thing you are buying – just exactly as if you are paying with coins or notes.  At present, credit card companies charge the vendor (and so ultimately you) for the privilege of using their cards.

The convertibility issue for those leaving or entering the Scotland would be dealt with by the Scottish port of entry authorities, and might involve the issuing of temporary SPOCA cards to visitors.

What about the digital security of SPOCAs? Estonia already has a national system of digital IDs, which enable instant and secure authentication, communication and identification in everything from internet banking to picking up a prescription. The IDs are available to outsiders too, under Estonia's ''e-residency'' programme. In a pilot project launched in the third week of August 2017, French citizens with European eIDAS digital IDs are able to open an HSBC bank account in Britain.

One enormous advantage of this SPOCA system would be the privacy issue. Nobody could monitor, and hence data mine, your spending habits. Only under clearly defined circumstances would the Scottish Government have access to SPOCA card data.

At present, whenever you use a plastic card the private card providers know exactly what you bought, how much you spent and even where you were when you made the purchase. Recently, there have been a number of well-documented cases where people have been tracked down almost exclusively via their use of cards. Not only the banks and card companies, but retailers (for example the supermarkets) also can have this personal information and can us it to track what you buy and (amongst other things) send you targeted advertising. Even more sinister, it is not generally known that card companies have the power to deny someone access to a card and even rescind an extant card – all without giving reasons. What would a person do in a cashless society if they did not have a card?

Before the private banks and card companies take complete control of our country's financial system, let the Scottish Government take the initiative, and take back control over our legal tender, and make Scotland a truly cashless society. 

Doug Clark
Currie, Midlothian

WHY all of a sudden have most of the “Scottish” high street bank branches converted some of their ATMs to dispense Bank of England only notes? At 57 years of age I, and many others, have survived quite happily without that facility. I do not buy the excuse it is to provide customers with holiday money. Like most people I take a credit card with me on holiday if I require extra cash, not Sterling.

Kenneth Young