Rinshi Sunak, the Chancellor of the Exchequer for the UK, has asked the Royal Mint to create a non-fungible token (NFT) by summer.
There are few details as to what this NFT will look like, if real world value will be attached, or the number of items that will be minted and available for purchase; but it’s likely that it will be something commemorative to mark the moment of a nation launching NFT collectables.
Nations creating and selling NFTs is not unheard of, with Ukraine creating 54 NFTs to document the early events of Russia’s invasion. These NFTs helped support their military, and also received millions in crypto donations from around the world to support their efforts. This is a major signal of cryptocurrency adoption in Britain as one of the first nations to take NFT technology seriously, and create value for collectors.
Earlier this week the European Union passed legislation to heavily regulate ‘know your customer’ (KYC) transactions conducted with cryptocurrencies. If enacted, this law will require crypto exchanges to report their customers to authorities whenever a transaction over €1,000 is conducted with crypto. There has been an outcry from the crypto community as this law unfairly targets individuals using crypto rather than fiat currency.
The United Kingdom’s NFT announcement coming shortly after the EU regulation news broke demonstrates another way the UK is distancing itself from the EU, by choosing to embrace blockchain technology. Adoption on the national levels of Britain, Ukraine, and El Salvador legitimise the crypto investors and the mission of financial freedom.
The United Kingdom is also considering creating a Central Bank Digital Currency (CBDC) to its citizens as an alternative to using fiat currency. A CBDC Taskforce was created in order to assemble the HM Treasury and the Bank of England to coordinate and explore the creation of a CBDC. There are many red flags with this news, and the potential of digital currencies being created and controlled by central banks.
These digital currencies would be subject to all of the same pitfalls and outside influence that occurs with traditional fiat currency. The Bank of England states that crypto assets such as Bitcoin are risky, and investors should be prepared to lose all their money. It also asserts that a UK central bank digital currency would be ‘reliable and retain its value over time’. With inflation at 6.2%, it’s sensible for investors to look for safe haven assets and have lost faith in the monetary policies of Central Banks.
A CBDC would also lead transactions more susceptible to surveillance and the tracking of payments. The ability to monitor transactions, control payment processes, and shut down accounts would be significantly easier with a centralised currency. While a CBDC is only being explored at the moment, it would be at odds with decentralised cryptocurrency adoption and financial freedom for citizens.
The crypto community is hoping that the news of the Royal Mint creating an NFT means that the UK is taking a significant step towards decentralised blockchain technology adoption. Nations are used to having control of banking and financial systems; however they are beginning to see the merits of digital currencies and parlaying that into their own centralised currencies.
In the end it will be futile to resist the decentralised nature and merits of blockchain tech, and countries that choose to adopt this technology sooner will be better off than the countries that resist.