UK to mint its own NFT and push forward with crypto regulation


In this photo illustration, a novelty Bitcoin token is photographed on 10 pound notes.

Matt Cardy | fake images

LONDON — The UK government on Monday announced plans to mint its own non-fungible token, as part of a push to become a “world leader” in the cryptocurrency space.

Finance Minister Rishi Sunak has asked the Royal Mint, the state-owned company responsible for minting coins for the UK, to create and issue the NFT “by the summer,” city minister John Glen said at an event. fintech in London. “More details will be available very soon,” he added.

The initiative is part of a broader government effort to “lead the way” in crypto, according to Glen. The minister announced a series of steps the UK will take to subject digital assets to greater regulatory scrutiny, including plans to:

  • Bringing certain stablecoins into the UK payments framework so that stablecoin issuers and service providers can “operate and grow in the UK”.
  • Inquire about a “world leading regime” to regulate the trade of other cryptocurrencies, including bitcoin.
  • Ask the Law Commission to consider the legal status of blockchain-based communities known as decentralized autonomous organizations, or DAOs.
  • Examine the tax treatment of decentralized finance (DeFi) lending and “staking,” which gives crypto users the ability to earn interest on their savings.
  • Establish a crypto asset engagement group to be chaired by ministers and host members from UK crypto regulators and companies.
  • Explore the application of blockchain technology in the issuance of debt instruments.

“We shouldn’t think of regulation as static and rigid,” Glen said. “Instead, we should think in terms of a regulatory ‘code’, like computer code, that we refine and rewrite as needed.”

CNBC previously reported on government plans to reveal a regulatory framework for crypto assets and stablecoins.

Stablecoins, cryptocurrencies that derive their value from sovereign currencies such as the American dollarthey are a controversial but fast growing phenomenon in the world of cryptocurrencies.

Tether, the world’s largest stablecoin, has a circulating supply of over $80 billion. But it has drawn criticism for a lack of transparency around the reserves backing the token.

Glen said the government was also “widening” its sights to look at other aspects of cryptocurrencies, including the so-called Web3, a movement proposing a more decentralized version of the internet based on blockchain technology.

“No one knows for sure what Web3 will look like,” Glen said. “But there is every chance that blockchain will be an integral part of its development.”

“We want this country to be there, leading from the front, looking for the greatest economic opportunity.”

mixed signals

Industry insiders have called for clarity on the UK’s position on cryptocurrencies as lawmakers around the world begin to take a closer look at the $2 trillion market.

Last month, US President Joe Biden signed a executive order urging government-wide coordination when it comes to regulating cryptocurrencies. The move was seen as broadly positive for the industry

Meanwhile, European Union lawmakers recently voted against the measures that would have put the future of crypto mining at risk. However, they too approved new rules cracking down on anonymous crypto transfers.

Back in the UK, British regulators have taken a tough tone on digital assets.

The Financial Conduct Authority has turned away the vast majority of crypto businesses applying to register with the watchdog, warning that it is concerned that too many “financial crime red flags” are going unnoticed.

Last week, the FCA extended to critical deadline for cryptocurrency businesses on a temporary registry, including Revolut and Copper, for full authorization. Philip Hammond, a former UK finance minister, is an adviser to Copper.

Several companies have been forced to liquidate their UK crypto operations and move abroad after failing to enter the final registry, including, B2C2 and Wirex. Only 33 signatures have been approved by the FCA.