Plans for the Royal Mint to issue UK government-backed non-fungible tokens (NFTs) have been scrapped less than a year after the scheme was announced. The crypto assets sector has been under the microscope in recent months following the high-profile collapse of the FTX exchange and several cryptocurrencies, and yesterday it was announced that Binance, the world’s biggest crypto exchange, was being sued by the US government for running and “illegal” exchange and a “sham” compliance programme.
Answering a question on the NFT scheme from Conservative MP Harriet Baldwin in Parliament on Monday about the progress of the NFT, Treasury minister Andrew Griffith said: “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.”
Tech Monitor has contacted the Treasury for further information on why the scheme has been canned.
Treasury scraps plan for UK government-backed Royal Mint NFT
NFTs are unique digital assets which have become popular trading commodities over recent years. The Royal Mint NFT plan was first announced last April by then Chancellor Rishi Sunak, as part of a range of measures to make the UK a “global crypto asset hub”.
“We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term,” Sunak said at the time.
The Royal Mint NFT would have been a collectable token, though what sort of artwork it was due to feature was never announced. “By creating NFTs we plan to help customers own digital collectables in a secure and trusted way, while engaging a new audience with The Royal Mint,” a Treasury spokesperson told Tech Monitor last year.
However it seems that, as prime minister, Sunak is less keen on NFTs. This might be because interest in the digital tokens has slumped since last April, according to data from Google which shows that the number of searches relating to NFTs has plummeted.
Indeed, there has been a marked change of tone in the government's attitude to crypto assets, with the Treasury pressing ahead with plans to regulate traditional cryptocurrencies and stablecoins in a similar way to other financial services. A consultation on potential new laws launched in February.
Binance sued in the US as crypto winter continues
The wider problems in the crypto asset market may also have dampened the government's enthusiasm for NFTs. The last year has seen the FTX cryptocurrency exchange collapse amid allegations of fraud, while a so-called stablecoin, Terra, also collapsed costing investors millions. Its founder, Do Kwon, was reportedly arrested last week in Montenegro.
Meanwhile the US government's Commodity Futures Trading Commission (CFTC) announced on Monday it is suing Binance, its founder Changpeng 'CZ' Zhao, and the company's former chief compliance officer Samuel Lim. Following an investigation, launched as part of a wider crackdown on crypto businesses, the CFTC says Binance "willfully evaded" US rules designed to stop crypto assets being used in illicit activities, and that its compliance programme was a "sham".
Binance is central to the global crypto industry, and processed trades worth $23trn in the last year. The platform is banned in the UK following an FCA ruling in 2021.
Zhao described news of the charges as "unexpected and disappointing", and said: "Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterisation of many of the issues alleged in the complaint."