The UK Chancellor, Rishi Sunak, has asked the Royal Mint to make an NFT. But what exactly are NFTs and what does it mean for the country?
Sunak has asked Royal Mint to create a non-fungible token (NFT) ‘which is to be issued by the summer’, according to a report by Reuters last night, Monday April 4.
What is an NFT?
An NFT or non-fungible token is a non-interchangeable unit of data stored on a blockchain, or a form of digital ledger, that can be sold and traded. It has similarities to cryptocurrency, like Bitcoin, as it’s generally built using the same kind of programming. However, physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another – an NFT cannot.
An NFT can represent both a digital asset such as an image, but it can also track real-world assets, such as a house or car, or a song, for example.
Some critics say the tokens are valueless and bad for the climate such as the WWF.
What does Sunak Want?
According to reports Sunak wants to be working with the Royal Mint on an NFT “this summer” as confirmed by Sunak’s secretary to the Treasury John Glenn, while speaking at a financial technology conference in London on Monday.
He said: ‘I am announcing today that the Chancellor has asked the Royal Mint to create a non-fungible token – an NFT – to be issued by the Summer, an emblem of the forward-looking approach we are determined to take.’
Sunak himself said it was his ‘ambition to make the UK a global hub for cryptoasset technology’.
He continued: ‘The measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.
‘We want to see the 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. This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.’
What Does It Mean For the country?
The biggest worry among critics is how stable an NFT could be, but the Treasury said it will ‘proactively explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets, which enables data to be synchronised and shared in a decentralised way to potentially achieve greater efficiency, transparency and resilience’.
The government has also pledged to introduce new laws creating a financial market infrastructure “sandbox” that will, it says, ‘enable firms to experiment and innovate in providing the infrastructure services that underpin markets, in particular by enabling DLT to be tested’.
