Treasury remains committed to NFT despite crypto crashbit2main
Ministers are pressing on with plans to create a UK-backed non-fungible token (NFT), despite a crash in cryptocurrencies and the exit of key Treasury personnel backing the controversial project.
The Treasury confirmed it is still committed to creating an NFT, a kind of certificate proving the holder’s ownership of another – typically digital – assets.
A spokesman said: “We are firmly committed to putting the UK at the forefront of crypto-asset technology and innovation by capitalising on the freedoms gained by leaving the European Union.”
Rishi Sunak, the former chancellor, threw his weight behind creating a state-endorsed NFT this year as part of efforts to attract more crypto-related business to the UK.
He instructed the Royal Mint to create a token by this summer. The cost of the plans has not yet been disclosed.
It is understood that the UK NFT will be a kind of collectable digital artwork, extending the range of existing collectible products the Royal Mint produces.
A spokesman for the Royal Mint said: “We are continuing to develop our first NFT range. We will share further details in due course.”
Alongside the former city minister John Glen, who also resigned earlier this month as part of the defenestration of Boris Johnson, Mr Sunak had championed growing the sector, despite warnings of regulators who have highlighted crypto risks.
The Government has previously said it wants the UK to be “the very best place in the world” for crypto businesses.
A market rout across crypto assets – dubbed “crypto winter” – has cast a shadow over the efforts. Top cryptocurrency Bitcoin, seen as a bellwether for the sector, has lost about two-thirds of its value since November. Last week, Celsius, one of the world’s biggest cryptocurrency lenders, filed for bankruptcy and told a New York court it had $5.5bn (£4.6bn) in liabilities when it collapsed and a deficit of $1.2bn.
In a speech last week, Bank of England deputy Governor Sir Jon Cunliffe said the majority of crypto-tokens have “no intrinsic value” and are “inherently volatile, very vulnerable to sentiment and prone to collapse”.
Sales of NFTs fell to a 12-month low in June amid a wider sell-off and waning enthusiasm for the tokens, which have chiefly been associated with digital art sales. According to a report by Chainalysis, a crypto research firm, NFTs sales totalled just over $1bn last month, having peaked at $12.6bn in January.