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UK government shelves plan for non-fungible token

NFT on pause: Global Government Fintech's coverage from 4 April 2022 of the UK government's planned NFT release | Credit (HMT photo): © Crown copyright

The UK government has shelved an eye-catching plan – revealed almost 12 months ago – for the release of a non-fungible token (NFT) created by the Royal Mint.

Rishi Sunak, who at the time was chancellor, asked the Royal Mint to create a government-backed NFT – ‘one-of-a-kind’ digital assets that are created and stored using blockchain – last year. The now-PM had requested the government-owned mint produce the NFT by last summer, with HM Treasury (HMT)’s economic secretary John Glen (now chief secretary to the Treasury) telling an event on 4 April 2022 that details would be available ‘very soon’. But things went quiet.

Glen’s successor as economic secretary Andrew Griffith has confirmed this week that a handbrake has been pulled up on the plan, saying: ‘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.’

Griffith provided the update in response to a question from Conservative MP Harriett Baldwin, who is chair of the House of Commons Treasury select committee.

“We have not yet seen a lot of evidence that our constituents should be putting their money in these speculative tokens unless they are prepared to lose all their money. So perhaps that is why the Royal Mint has made this decision in conjunction with the Treasury,” Baldwin was quoted by the BBC as saying in response to Griffith’s update.


‘Emblematic’ no longer

In a speech that announced the NFT plan, Glen said that “never in the history of commerce has there been invention as hyped and misunderstood as distributed-ledger technology [DLT] and blockchain.”

He described in his remarks – which spanned a range of topics related to innovative finance – the government’s NFT ambition specifically as “an emblem of the forward-looking approach we are determined to take”.

Glen’s speech also mentioned that the government would be exploring “whether it’s possible to apply DLT to the debt issuance process”. “Could the UK one day issue a debt instrument using DLT?”, Glen asked the audience, adding “I don’t yet know the answer – but let’s find out.”

The UK government, Glen said at the time, was “already effectively using crypto-technologies to make government more efficient”, explaining that saying it was “developing opportunities to use distributed ledger technology for customs and international trade, to ease the import of goods, and we will continue to support further opportunities to deploy that technology.”

In the speech he lauded the “extraordinary, mercurial, underlying technology that makes ‘crypto’ possible”, saying that “we can be pretty sure” it was “going to have profound effects across multiple domains”. But he acknowledged the lack of consensus on “even whether crypto itself is a good thing” with “a massive debate between the sceptics and the evangelists”.


Labour dismisses ‘crypto gimmick’

NFTs were much hyped around 12-24 months ago but the buzz has diminished amid a broader slump affecting cryptocurrencies.

The UK opposition Labour Party has welcomed the NFT handbrake, with shadow City minister Tulip Siddiq dismissing the original plan as a ‘crypto gimmick’.

“I’m glad that the Royal Mint has finally made the Conservatives see sense, but we’ve been calling on the chancellor to drop this crypto gimmick for months,” Siddiq said this week. “This out-of-touch government should be focused on the cost-of-living crisis, not wasting time and taxpayers’ money on an NFT vanity project and promoting dodgy stablecoins.”

The UK government last month opened a consultation on plans to ‘robustly’ regulate a ‘broad suite of’ cryptoasset activities. The three-month consultation includes proposals such as the bolstering of rules covering crypto trading platforms and the introduction of what is billed as a ‘world-first regime’ for crypto lending.

The 82-page ‘Future financial services regulatory regime for cryptoassets’ consultation will close on 30 April, after which the government work to set out its response. Its publication followed earlier HMT proposals focused on stablecoins and crypto-asset promotions.


UK government to mint own NFT – our news article (4 April 2022) on the announcement of the NFT plan


The Global Government Fintech Lab 2023 will be taking place in Dublin on Thursday 18 May. The Lab, our one-day event for senior public servants interested in exploring and implementing fintech solutions, is being organised in partnership with Ireland’s Department of Finance. The event, which is free to attend for all public servants, will feature keynote speeches, panels and breakout sessions focused on fintech-related opportunities and challenges for those working in central government, agencies and other public authorities.