Scottish Bill Problem Why the UK has £100 Million Notes

This boring banknote may look like it is  from the 18th century, and I wouldn’t fault   you for thinking that. But believe it or  not, not only is it from the 21st century,   but it’s also perfectly legal tender. It’s called Titan and is a 100% real 100 million  pound banknote. Yep - that is 1 followed by eight   zeros. One hundred million. Its cousin, the Giant,  is a £1 million banknote and is also legitimate,   issued by the Bank of England, just like any other  Pound Sterling banknotes you're familiar with. You might think the number of zeros in these notes  is ridiculous, but they aren’t even the largest   denominator of the bill seen in a country.  This is Zimbabwe's 100 Trillion Dollar note   equivalent to a whopping 40 US cents and here  is a 100 Trillion Mark from war-torn Germany,   equal to some 20 US dollars at  that time. Hungary, Argentina,   Yugoslavia, and Venezuela have had their  big notes at different points in history. These banknotes are a result of  financial crisis and hyperinflation   and although these bills have absurd  values, many are basically worthless,   and those that do have value are worth nowhere  near as much as the number on the paper. There are endless reasons why a country would be  pushed into hyperinflation, and we won’t discuss   them here, but often when corrupt governments make  bad financial decisions and banks irresponsibly   start to print more money than is sensible,  existing bills devaluate, sometimes until they   lose all their worth. Such notes are useless and  almost nothing more than a fine piece of paper. So it might come as a surprise that the United  Kingdom also has its own mega-banknote. Britain   hasn’t had any serious inflation in ages. In  general, pound sterling is a stable currency,   meaning the £100 million Titan and £1  million Giant are literally worth what   they say they are. While they’re legal  tender, the concept is bewildering;   who would need a million-dollar banknote in a  digitized world where most transactions happen   over computers? And if that’s true,  then why do these notes even exist? It turns out the answer is  not quite what you expect. The Bank of England is the central bank of the  United Kingdom and it has a monopoly on the issue   of notes for England and Wales. No other bank  in England and Wales is allowed to print money,   but this wasn’t always the case. Until the middle of the 19th century,   printing banknotes was considered  the norm as most of the UK’s   Privately owned banks - big or small -  issued their own bills of different colors,   sizes and featured personalities,  depending on their local history. They were backed up by actual assets, usually gold  to maintain the confidence of people in the notes.   However over time banks weren’t all doing  it responsibly and were not able to back   the notes up with actual assets, especially in  times when the country faced a shortage of Gold. When a series of banks collapsed in England and  their issued banknotes created chaos among people,   the government realized the need to  restrict the note-issuing powers of banks.   Through various Banking Act along the  way and finally, by Bank Charter Act of   1844, the parliament gave exclusive note-issuing  powers to the central Bank of England. The English Pound Sterling issued by the bank  holds the portrait of the British Monarch and are   the most popular Pound Sterling notes in the UK. On a Sidenote, the Queen has appeared so many   times on so many banknotes in the  last 85 years that you can actually   make a progressive timeline of her life.  Credit goes to LEMMiNO for this animation. In Scotland and Northern Ireland, the case  was different. Their banks were relatively   more responsible and were harmed much  less in financial crisis over the years,   so they argued that there was no need for them to  restrict their rights of printing their own money,   which, they believed, was a  part of their cultural identity. This guy named Walter Scott, a popular  novelist, and poet in Scotland,   adopted the transparent persona of one  of his characters and wrote letters and   pamphlets to launch a caustic attack on the  government proposal. Public meetings were   held throughout the country to tell people that  the Scottish Banking System was doing just fine   and the new banking measures would  prove to be disastrous for them.   It was unjust to punish Scottish banks for  the misdeeds of their English neighbors. As a result of the vigorous campaign, the  parliament made exceptions for the region,   private banks in Scotland and Northern Ireland  got to keep their note-issuing powers and Walter   Scott got featured on some of the Scottish  notes. Win for all you would think except now,   the government required these private  banks to back up their paper money with   an equivalent amount of Bank of England  notes as security, to avoid over-printing. Every pound in currency these banks produced,  another pound was deposited to the Bank of   England for safekeeping. This means that  in the event of one of these Scottish or   Northern Irish banks collapsing and their  pound notes falling out of circulation,   the same value of money was  secured in the Bank of England.   Thus, holders of the uncommon pound notes had  security that their bills were still worth their   real value because the Bank of England was  holding their money in English pound notes. Now, printing billions of pounds worth of notes  and then holding this money as a backup for   centuries was a problem for the Bank of England  and in order to reduce the vault space used,   they used a solution – compress an enormous  value into just a few banknotes. These bills   are the Titans and Giants, worth £100  million and £1 million respectively.   Unlike smaller values of notes,  the Titans and Giants are printed   internally and locked in maximum security,  which explains their primitive design. Unlike the typical pound note or dollar bill;  the Titans are printed on A4 paper and Giants are   printed on A5 paper. Titans require signing by the  Chief Cashier before they can become legal tender. The Titans are Giants are not in  circulation for obvious reasons.   No cash machine will ever dispense a  £1 million or 100 million pound note,   unless in the case of hyperinflation,  like that of Germany after World War I. However complicated it may sound, this system  has allowed Scotland and Northern Ireland   to have their own banknotes in  fantastic colors and designs,   which represent their culture and  pay respect to their personalities. After various consolidation and  rebranding, currently, there are 3   banks in Scotland and 4 in Northern  Ireland that issue their paper money.   They are the only ones in the UK  that do not feature the Monarch. In 2015, Scotland’s Clydesdale Bank was the first  to issue a polymer note in the Great Britain.   Ulster Bank from Northern Ireland recently issued  the first vertical banknote in the country.   These attractive colorful notes also  act as a marketing tool for banks   since the bearer is often reminded of these  banks and it's a major reason why banks   don't want to give up their  rights of printing money. All is not well, though, Scottish and  Northern Irish banknotes have been   subject to much controversy and confusion  among English people. Like I said before,   these bills are legal and authorized by the UK  parliament, which means they are accepted in   all banks and post offices across the UK. They  are widely used for day-to-day transactions of   goods and services in their respective regions,  and also in England and Wales to some extent. However, technically speaking, they're still not  considered "legal tender" according to the law.   "Legal Tender" is a technical term with little  practical meaning and it should not be confused   with the "Legal" or "Authorized" nature of a  Banknote. Not being a 'legal tender' means that   a person can refuse to take these notes to settle  a debt issue and he/she cannot be taken to courts.   But as long as buyers and sellers  agree to use these banknotes for   day-to-day transactions, there will be no issue. Ignorance and misinformation have led many  businesses in England and Wales to believe   that Scottish Banknotes are less valuable than  English ones, so they look at them suspiciously.   A survey conducted among Scottish people in  2014, found that 70% of scots have had their   cash payments rejected in England. 50% of them  were told that their money wasn't legal tender. Another survey conducted  among English people in 2019,   found that 76% were unable to identify where  the Scottish currency was from while 33%   believed the notes to be counterfeit or fake.  Many thought they looked like monopoly money. All of this causes much embarrassment  and irritation to Scots when their   paper money is rejected in England. Several MPs from Scotland have raised   objections against this discrimination of  Scottish paper money in the last decades.   The proposed bill to legally compel businesses  in England to accept Scottish banknotes was   rejected in 2009 and again in 2019. Many  argue that Scottish and Northern Irish   banks should just use the same printed  currency as England to avoid confusion. In the fight between banknotes, these regional  banks seem to be losing the battle. Last year,   one of the 4 banks of Northern Ireland announced  that they would gradually stop issuing their own   banknotes and would switch to dispensing Bank  of England notes from their ATM network. Another   Northern Irish bank has withdrawn their £50 & £100  notes and now issue Bank of England £50 instead. If more banks follow this way, the Giants and  Titans may not be needed to back the value of   uncommon notes anymore. For now, the Titans  and Giants live on and lay claim to a great   deal of fame. One 1 million pound note was  sold for £69,000 at a specialist sale in   London a decade ago, even though it is, in a  practical sense, still just a piece of paper. And that’s the small but curious tale of Britain’s  100 million pound banknotes. If you like the video   then I highly recommend the story 'The Million  Pound Bank Note' by the famous Mark Twain. It's   available on audible and you can get the audiobook  for free if you use the link in the description.

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