Yesterday, 4 April 2022, the Economic Secretary to the Treasury gave a keynote speech at the Innovate Finance Global Summit setting out the government's plan to "lead the way" in the development of the global digital asset economy.
As part of the keynote speech, it was announced that the Royal Mint has been instructed to mint its own NFT for release this summer, prompting the Treasury Twitter account to post an image of the Royal coat of arms on a blue background.
Whilst undoubtedly a headline-grabbing statement, for those interested in the development of the broader digital asset economy, the more important aspects of yesterday's announcement concerned the proposals for establishing the regulatory framework for the use of blockchain technologies (including the tax treatment of certain financial instruments). Specifically, the plans to:
- Bring stablecoins within the UK’s existing regulations on electronic payments.
- Consult on a “world-leading regime” for regulating trade in other cryptocurrencies, including bitcoin.
- Ask the Law Commission to consider the legal status of blockchain-based communities known as decentralized autonomous organizations (DAOs).
- Examine the tax treatment of decentralized finance (DeFi) loans and “staking,” which gives crypto users the ability to earn interest on their savings.
- Explore the application of blockchain technology in issuing debt instruments
In order to do this, the government plans to establish a Cryptoasset Engagement Group that will be chaired by ministers and host members from UK regulators and crypto businesses. The government has also identified the English legal system as a potential advantage for those concerned about regulation and enforcement in a developing area. Specifically, it highlighted the work done by Sir Geoffrey Vos, Master of the Rolls and head of the UK Jurisdiction task force which has been consulting on how English law can apply in this area.
All of which is encouraging and most welcome for those operating in the sector already, and possibly of more long term value to the sector than the Treasury NFT.
You may not think that there would be much of a market for government related NFTs but the Treasury is not the only government institution to be looking at releasing NFTs.
On 3 April 2022, Dubai police became the first government entity in the UAE to create its own digital asset. 150 of the NFTs were available for free to those registering their interest through social media channels. The release is "in line with the government’s growing interest in virtual assets and contributes to attracting those interested in the modern digital trend" according to Brigadier Khalid Nasser Al Razooqi, Director of the General Department of Artificial Intelligence at Dubai Police.
Britain announces plans to mint its own NFT as it looks to ‘lead the way’ in crypto