The UK Government has started the formal process to allow the Scottish government to issue bonds, the BBC reports.
The move, which comes in the wake of the Smith Commission report recommending further devolution of power to the Scottish Parliament, will allow the country to fund borrowing through the issuance of bonds from April 2015.
The reform was first set out in the Scotland Act 2012, with borrowing north of the border subject to a cap of £2.2bn.
Treasury Chief Secretary Danny Alexander described the development as a “big step” towards handing more power to Holyrood.
He said: “By beginning this process now, we will be able to have legislation in place to ensure that Scotland can issue bonds from April next year.
“Being able to issue bonds will give the Scottish government an additional source of capital funding as part of its new tax and borrowing powers contained in the Scotland Act 2012.”
He added the combination of the Scotland Act and the Smith Commission recommendations, once implemented, will make the country “one of the most powerful devolved administrations in the world”.
However, a Scottish government spokesman described the £2.2bn limit as “arbitrary”.
He said: “This was promised as part of the Scotland Bill in 2012. In fact the UK government announced in February that it would give Scotland the ability to issue bonds in exercising the capital borrowing powers which will be devolved from next year.
“These orders do not give Scotland new borrowing powers and they do not remove the arbitrary limits imposed by HM Treasury.
“We welcome the Smith Commission proposal that both governments should consider the merits of introducing a prudential borrowing regime and hope that progresses more quickly than the granting of powers to issue bonds.”