U.K. Drops Plans To Mint NFTs

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The U.K. has shelved plans to create its own government-backed NFTs.

The U.K. government first announced plans to create its own NFTs, produced by the Royal Mint, in April 2022. At the time, the plans were enthusiastically backed by the then chancellor, Rishi Sunak, who has since gone on to become prime minister.

However, the government has changed its mind following a lengthy consultation period, with the Treasury now announcing that it was "not proceeding with the launch", but will keep the proposals "under review", according to a report from the BBC.

The chair of the Treasury Select Committee - a cross-parliament committee that reviews the work of the Treasury - poured scorn on the idea of NFTs. "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," she told the BBC.

When the plans were first announced last year, the NFT bubble was already showing signs of bursting. Almost a year later, the momentum appears to have been completely sucked out of the market, perhaps explaining the U.K. government's reticence to proceed with the planned launch.

At the time of the initial announcement, Rishi Sunak claimed the NFTs would give the U.K. economy a boost. "We want to see the [cryptocurrency] businesses of tomorrow - and the jobs they create - here in the U.K., 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 U.K. financial services industry is always at the forefront of technology and innovation," Sunak added.

The NFTs were only part of a series of initiatives that were designed to "make the U.K. a global cryptoasset technology hub". Other initiatives included the regulation of stablecoins and the creation of a "financial market infrastructure sandbox" to help firms innovate around cryptocurrencies. The Treasury also announced it would be exploring ways to tweak the tax system to encourage the crytpoasset market.

It's not clear whether any of these initiatives will now proceed.

The dropped plans may also raise further doubts over plans to create a digital currency for the U.K.

When giving evidence to the Treasury Select Committee in February, Sir Jon Cunliffe, deputy governor for financial stability at Bank of England said he felt it was more likely than not the U.K. would require its own digital currency.

"There are lots of different motivations for having a digital pound," he said. "Our basic motivation, and the reason we think it is likely to be needed, is to provide digital cash -- the digital equivalent of Bank of England notes -- for general payment purposes."

However, he admitted the Bank of England didn't have the skills to launch the currency itself. "We would hope by the end of this next phase to have the skills to move with private sector partners to the next stages, which would be to build a working prototype to test in a simulated environment, then testing in a live environment, and then implementation," he said. "The next phase is designed to put us in a position to do that."