The Governor of the Bank of England has set out what he sees as the potential costs - and benefits - of Scotland using Sterling if Scots back independence.
The SNP government has said it wants to use Sterling of Scots vote 'Yes' to independence in September.
In a speech in Edinburgh this afternoon Mr Carney was clear that the decision on independence was a matter for Scots.
The arrangements on currency in the event of a Yes vote would be for the Scottish Government and the rest of the UK to work out.
He said he was not passing "judgement on the relative merits of the different currency options for an independent Scotland", but instead "drawing attention to the key issues".
He added: "This is a technocratic assessment of what makes an effective currency union between independent nations."
Mr Carney said that there were benefits in a currency union including eliminating transaction costs, and promoting investment by reducing uncertainty over currency movements.
But he also said that a flexible exchange rate where a country had its own currency can act "as a valuable shock absorber when domestic wages and prices are sticky. For example, suppose demand for a country’s exports falls".
He also said a currency union required "a common fiscal backdrop for its central bank". The central bank had to be able to be the "lender of last resort" to financial institutions.
He added: "The euro area has shown the dangers of not having such arrangements, as well as the difficulties of the necessary pooling of sovereignty to build them.
"An independent Scotland would need to consider carefully how to develop arrangements with the continuing United Kingdom that are both consistent with its sovereignty and sufficient to maintain financial stability."
First Minister Alex Salmond met Mr Carney earlier today.