UK Government Abandons Plans for Royal Mint-made NFT

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Less than a year after announcing the project, the UK government has abandoned its plans to create a non-fungible token through the Royal Mint for sale.

This statement was made in April of last year. Rishi Sunak, the then Chancellor and now Prime Minister, welcomed it with great enthusiasm. The British government was simultaneously working to regulate the stablecoin market by integrating them into a trusted payment system.

As of now, the UK Government has scrapped its intentions to launch the non-fungible token for now.

Andrew Griffith, the Treasury’s Economic Secretary, confirmed the abandonment in response to a question by Conservative MP Harriet Baldwin. He noted, “In consultation with HM Treasury, the Royal Mint is not proceeding with the launch of a non-fungible token at this time but will keep this proposal under review.”

The Royal Mint-made NFT was to be part of a larger drive to make the nation more appealing as a location for cryptocurrency innovation.

What Went Downhill for Treasury’s NFT Plans?

According to a statement made on Monday by Griffith, though the ideas are not progressing at this moment, they are still under review. This means that the NFT plans are not entirely scrapped as of now and may be revived at a later date.

The Treasury had requested the Mint to make the token in April 2022. According to the statement made at the time, it “shows the forward-looking approach we are determined to take towards crypto assets in the UK.”

However, there was not much movement over the course of the year toward this vision. The Mint provided neither a visual representation of the proposed NFT, nor any technical justification for how it would operate, what benefits it would provide users, or what blockchain it would be based on.

Harriet Baldwin, who, as the Treasury’s Select Committee’s Chair, oversees assessing the Treasury’s work, mentioned that the UK Government’s senior finance minister would be questioned about the persistence of the NFT issuance as a department policy. Baldwin has previously openly criticized the idea of NFTs and the industry-wide uncertainty associated with cryptocurrencies.

The decision to abandon the Royal Mint’s NFT ambitions was made in part due to rising worries about consumers buying speculative tokens. According to Harriet Baldwin, there isn’t enough proof to recommend that constituents buy these tokens.

Besides, the industry has been engulfed in a slow-motion crisis over the past year. FTX, Celsius, Voyager, and Genesis have declared bankruptcy, along with the crypto-focused banks Silvergate and Signature, and Binance, the top cryptocurrency exchange, being the subject of a US regulatory probe. Such volatility could also be contributing reasons that the NFT collection’s introduction was postponed.

The Treasury had formerly stated that it will investigate changing the tax structure to support the growth of the cryptocurrency market. However, with the current state of the sector remaining “unpredictable”, all new initiatives have been put on hold. Back in 2017, the Royal Mint had hinted about intentions to track its gold supply using blockchain, but those plans were also frozen.

More Global Governments Going the Web3 Way

The Royal Mint-made NFT was being touted as a potential driver for the UK for further expansion in the crypto sector upon announcement. In recent years, the nation has been actively investigating various ways to attract crypto-related enterprises and talent.

NFTs are digital assets with an underlying blockchain that is used to secure and verify them. These digital tokens can be bought with fiat money or cryptocurrency and serve as ownership certificates for various virtual or physical assets.

Each NFT is a unique token that has its uniqueness verified by the blockchain, making them difficult to fabricate or duplicate. NFTs have developed into a lucrative asset class that can be purchased, sold, and traded like other types of property as a result, with some NFTs fetching millions of dollars at auctions. Recently, NFTs have proven their utility across sectoral applications, from gaming to entertainment, real estate to music, and medical records to IPRs.

Other world leaders have also started showing a willingness to use NFTs and other Web3 technologies. In October 2022, Japan declared its plan to employ NFTs and metaverse services to finance the country’s digital transformation. Despite strict regulations on cryptocurrencies, China launched an NFT and digital asset marketplace in January 2023. India, holding the G20 presidency this year, has initiated several rounds of meetings on the utility and future of cryptocurrencies.

The Roadmap for the UK in the Cryptosphere

Sunak established the UK government’s strong support for cryptocurrencies throughout his tenure as Chancellor.

In 2021, he established a task force to examine if the Bank of England should establish a “central bank digital currency”, aimed at a more open, greener, and technologically advanced financial services sector for the country. Speaking of the initiative, he highlighted its linkage with the UK being at the forefront of innovation and that much more needs to be done.

It is left to be seen what course the UK takes under his Prime Ministership.

The Treasury and the Bank of England have only said that the sterling-pegged stablecoin, popularly known as the “Britcoin,” will “likely” be produced at some point. The UK government is also yet to put a crypto regulatory framework into effect.

The Royal Mint’s decision to abandon its intentions to establish an NFT and a British stablecoin is a setback for the UK’s aspirations around digital assets. The Royal Mint had the opportunity to make these cutting-edge digital assets accessible to a wider audience, but its exit from the market emphasizes the difficulties and ambiguities surrounding digital assets.

Yet, as cryptocurrencies and other digital assets develop, there could be further developments and experiments, ultimately leading to increased crypto adoption and acceptance by the public.

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