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Originally Posted by Mr Angry
According to the Wikipedia link above it does: "The pound is the currency of Jersey. Jersey is in currency union with the United Kingdom, and the Jersey pound is not a separate currency but is an issue of banknotes and coins by the States of Jersey denominated in pound sterling, in a similar way to the banknotes issued in Scotland and Northern Ireland". |
A currency called the pound is used, just as many countries use a currency called "dollar". It just so happens the pounds are also interchangeable, but there is no formal arrangement for that. The Jersey AND current Scottish currency is NOT "legal tender". It does not have to be accepted.
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Most of the notes issued by the note-issuing banks in Scotland and Northern Ireland have to be backed by Bank of England notes held by the issuing bank. The combined size of these banknote issues is well over a billion pounds. To make it possible for the note-issuing banks to hold equivalent values in Bank of England notes, the Bank of England issues special notes with denominations of one million pounds ("Giants") and one hundred million pounds ("Titans") for internal use by the other banks.
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Currency printed in Scotland and Northern Ireland is simply a replacement for English pounds "bought" from the Bank of England. It is not additional currency. They are "buying" the right to print currency that would be printed anyway by the Bank of England.