U.K plans to create its own NFT to 'lead the way' in the crypto space
To become a "world leader" in the cryptocurrency space, the U.K. government has announced plans to create its own non-fungible token.
City Minister John Glen stated at a fintech event in London that Finance Minister Rishi Sunak has urged the Royal Mint — the government-owned firm tasked with issuing new coins in the U.K. — to manufacture and issue the NFT "before the summer."
"More information will be accessible very soon," said Glen.
According to Glen, the program is part of a larger government attempt to "lead the way" in crypto. The minister revealed a series of initiatives the U.K. will take to increase regulatory oversight of digital assets, including initiatives to:
- Introduce specific stablecoins into the United Kingdom's payments framework so that stablecoin issuers and service providers can "operate and thrive in the United Kingdom."
- Consult on creating a "world-leading system" for regulating the trade of other digital currencies, such as bitcoin.
- Request that the Law Commission review the legal position of decentralized autonomous organizations, or DAOs, which are blockchain-based communities.
- Examine how decentralized finance (DeFi) contracts and "staking," which allows crypto users to earn interest on their funds, are taxed.
- Create a Cryptoasset Engagement Group, which will be led by ministers and include representatives from U.K. authorities and crypto companies.
- Investigate the use of blockchain technology in the issuance of debt instruments.
Glen stated, "We shouldn't think of regulation as a static, rigid thing." "Instead, we should think of regulatory 'code,' similar to computer code, that we may update and replace as needed."
Stablecoins, or cryptos whose value is derived from sovereign currencies such as the US dollar, are a rapidly rising but divisive phenomenon in the crypto industry.
Tether, is the largest stablecoin in the world, with a circulating supply of over $80 billion. However, it has been chastised for the lack of transparency surrounding the token's reserves.
Glen said that the government was "widening" its scope to include other areas of crypto, such as Web3, a movement that advocates for a more decentralized internet based on blockchain technology.
"No one knows for sure how Web3 will appear," Glen explained. "But, there's a good chance that blockchain will play an integral role in its development."
"We want this country to remain at the forefront, seeking out the best economic prospects," said the City Minister.
As policymakers around the world continue to take a closer look at the $2 trillion sector, industry insiders have been demanding clarity on the United Kingdom's position on crypto.
President Joe Biden of the United States signed an executive order last month pushing government-wide coordination on crypto regulation. The move was widely regarded as beneficial to the industry.
Liverpool FC's participation in the NFT sector
Liverpool made the rather divisive choice to enter the non-fungible tokens (NFTs) market back in March. The renowned London auction house Sotheby's introduced the LFC Heroes Club collection of collectible virtual artwork, with a portion of the proceeds going to the LFC Foundation, Liverpool's football club's philanthropic organization, throughout the course of the five-day sale.
The sale fell short of expectations, bringing in only £1.125 million in revenue and leaving 95% of the NFTs on the market unpurchased. Only 9,721 of the 171,072 offered for purchase were actually sold, or 5.7% of the total decline.
In a speech at the Leaders Week sports conference recently at Twickenham Stadium, Liverpool's senior vice-president of digital marketing, media, and technology, Drew Crisp, acknowledged that the rollout had been somewhat of a learning experience but didn't completely rule out NFTs adoption into the Liverpool strategy going forward.
But given the possibility of investor financial loss and the environmental impact of the energy needed to "mint" NFTs on the blockchain, the club's introduction did not come without criticism. Only the NFTs that were purchased will appear on the blockchain because all of the LFC Heroes collection's unsold NFTs were never minted. The outstanding permutations cannot and will not be destroyed when an NFT is permanently taken out of circulation, because they have not yet been coined.
NFTs are a component of a new wave of income sources that have been available to clubs, including things like cryptos.
There has been much discussion about the "metaverse" and "Web 3.0," and several sports administrators believe that technology, such as virtual reality, would enable them to reach their worldwide hordes of supporters and give them the opportunity to enjoy, although artificially, what match-going fans do.
Crisp noted that having access to such technology to support those efforts was his "dream" for his time in football, but he also discussed the steps Liverpool is taking to try to make some headway already while emphasizing that it is a process that necessitates patience and where the financial rewards may not come quickly.
First published on Apr 4, 2022