LONDON — Monday’s announcement by the U.K. government that it will mint its own token is part of a push to become a “world leader in cryptocurrency.”
Rishi Sunak, Finance Minister, has asked the Royal Mint, the government-owned company that mints coins for the U.K., to create and issue NFT “by summer,” John Glen, City Minister at a fintech conference in London said. He said, “There will soon be more details.”
NFTs can be described as digital assets that are used to represent ownership of virtual items such as artworks or avatars in video games. They use blockchain technology, which is the same technology behind many cryptocurrencies. Celebrities and large corporations have increased their adoption of NFTs in the last year.
According to Glen, the U.K.’s NFT initiative forms part of a larger effort by the government “to lead the way” in crypto. The minister revealed a series of steps that the U.K. would take to place digital assets under greater regulatory scrutiny. These included plans to:
Glen stated that regulation should not be viewed as a rigid, static thing. Instead, we should think in terms of regulatory code — like computer code — that we modify and rewrite as needed.
CNBC has previously reported about the government’s plans for a regulatory framework to regulate cryptoassets, stablecoins, and other digital currencies.
Stablecoins are cryptocurrencies that take their value from sovereign currencies such as the U.S. dollar. They are a controversial but growing trend in crypto. Tether, which is the largest stablecoin in the world, has a total circulating supply of over $80 billion. It has been criticised for not being transparent about the reserves backing the token. Stablecoins will be introduced to the U.K. regulatory framework by the government.
Glen stated that the government was also “widening its gaze” to consider other aspects of crypto. This includes Web3, which is a movement that advocates a decentralized version on the internet based on blockchain technology.
Glen stated that “No one can predict what Web3 will look like yet.” “But it’s possible that blockchain will be integral to Web3’s development.”
“We want the country to lead from the front and seek out the best economic opportunities.”
Mauricio Magaldi is the global strategy director for crypto at 11:FS. He expressed doubts about the government’s plans to use NFT. In an email comment, he stated that the decision “seems to have been nothing more than a strategy PR-play.” He said that talk of the U.K. being a “crypto hub” holds much more promise.
As policymakers look closely at the $2 trillion crypto market, industry insiders are calling for clarity from the U.K. – especially crypto gambling could be affected from this.